blackgold natural resources limited

Co. Reg. No. 199704544C7 Temasek Boulevard

#08-07 Suntec Tower OneSingapore 038987

Tel : (65) 6884 4418 Fax : (65) 6884 4406www.blackgold-group.com

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19

SUSTAINABLY ENHANCINGA N N U A L R E P O R T 2 0 1 9

BOARD OF DIRECTORSSoh Sai KiangIndependent Non-Executive Chairman

Andreas RinaldiExecutive Director and Chief Executive Officer

Lim Chee SanIndependent Director

Chng Hee KokIndependent Director

Bangun Madong Parulian SamosirIndependent Director

Wahyu MahadiIndependent Director

AUDIT COMMITTEELim Chee San, ChairmanChng Hee KokSoh Sai Kiang

NOMINATING COMMITTEESoh Sai Kiang, ChairmanChng Hee KokLim Chee San

REMUNERATION COMMITTEEChng Hee Kok, ChairmanLim Chee SanSoh Sai Kiang

COMPANY SECRETARY

Nor Hafiza Alwi

AUDITORS

PRICEWATERHOUSECOOPERS LLPPublic Accountants and Chartered Accountants7 Straits View, Marina OneEast Tower, Level 12Singapore 018936

AUDIT PARTNER-IN-CHARGEMohamad Saiful SaroniAppointed since the financial year ended 31 December 2018

SHARE REGISTRAR

M&C SERVICES PTE LTD112 Robinson Road#05-01, Singapore 068902

PRINCIPAL BANKERSDBS BANK LTD12 Marina BoulevardDBS Asia CentralMarina Bay Financial CentreTower 3, Singapore 018982

SPONSORSAC CAPITAL PRIVATE LIMITED1 Robinson Road#21-00 AIA TowerSingapore 048542

REGISTERED OFFICE7 Temasek Boulevard #08-07Suntec Tower OneSingapore 038987Tel: (65) 6884 4418Fax: (65) 6884 4406Website: http://www.blackgold-group.com

CORPORATE INFORMATION

02 CORPORATE PROFILE

03 GROUP STRUCTURE

04 CORPORATE MILESTONES

06 CHAIRMAN’S STATEMENT

10 BOARD OF DIRECTORS

12 KEY MANAGEMENT

14 BUSINESS REVIEW

17 COAL RESERVES AND RESOURCES

18 CORPORATE GOVERNANCE REPORT

44 FINANCIAL STATEMENTS

102 SHAREHOLDINGS STATISTICS

104 NOTICE OF ANNUAL GENERAL MEETING

PROXY FORM

InnerBackCover


CONTENTS

This annual report has been reviewed by the Company’s sponsor, SAC Capital Private Limited (the “Sponsor”). This annual report has not been examined or approved by Singapore Exchange Securities Trading Limited (the “Exchange”) and the Exchange assumes no responsibility for the contents of this annual report, including the correctness of any of the statements or opinions made or reports contained in this annual report. The contact person for the Sponsor is Mr David Yeong (Telephone number: +65 6232 3210), at 1 Robinson Road, #21-00 AIA Tower, Singapore 048542.

BlackGold Natural Resources Limited (“BlackGold” or the “Company”, and together with its subsidiaries, the “Group”) is an Indonesia-focused coal mining company targeting Indonesia’s rapidly-growing power plant industry, with a specific focus on supplying coal to power plants located in Riau province, Sumatra, Indonesia.

The Group holds the mining rights to a coal concession in Sumatra, PT Samantaka Batubara (“PT SB”), as presented in the diagram below, covering approximately 15,000 hectares in acreage (“PT SB Concession”). The Group has, to date, explored a total area of approximately 10,000 hectares in the PT SB concession.

The Group is listed on the Catalist board of the Singapore Exchange Securities Trading (“SGX-ST”).

The listing was subsequent to the acquisitions of the entire issued and paid up share capital of BlackGold Asia Resources Pte. Ltd. and BlackGold Energy Limited as well as their respective subsidiaries, which was completed on 10 March 2015.

Through its subsidiary PT SB, the Group has an estimated total of 12.5 million tonnes of Coal Reserves and 110 million tonnes of Coal Resources as of 31 December 2019 (reported in compliance with JORC 2012).

PT Samantaka BatubaraConcession

In Production

BlackGold Natural Resources Limited Annual Report 201902

CORPORATE PROFILE

PT BlackGoldEnergy Power(2)

(Indonesia)

99%

99% 99%PT Ausindo

Andalas Mandiri(2)

(Indonesia)

PT Ausindo Prima Andalas(2)

(Indonesia)

Notes:

1) PT Bahagia Sakti Makmur (Indonesia), an investment holding company incorporated in Indonesia, holds 1.0% of non-controlling interest in PT BlackGold Energy Indonesia to comply with the Indonesian laws, which require a minimum of 2 shareholders in a limited liability company. For more information on PT Bahagia Sakti Makmur, please refer to the circular dated 30 December 2014 issued in connection with the reverse takeover of NH Ceramics Ltd.

2) PT Serasi Duta Pratama (Indonesia), an investment holding company incorporated in Indonesia, holds 1.0% of non-controlling interest in PT Samantaka Batubara, PT Ausindo Andalas Mandiri, PT Ausindo Prima Andalas, and PT BlackGold Energy Power to comply with the Indonesian laws, which require a minimum of 2 shareholders in a limited liability company. For more information on PT Serasi Duta Pratama, please refer to the circular dated 30 December 2014 issued in connection with the reverse takeover of NH Ceramics Ltd.

3) PT Samantaka Batubara holds the mining concession covering an area of 15,000 hectares in Riau Province, Indonesia.

Listed Parent and Issuer

Group Companies

Asset Holding Companies

BlackGold AsiaResources Pte. Ltd.

(Singapore)

BlackGoldPower Pte. Ltd.

(Singapore)

BlackGoldEnergy Ltd

(Hong Kong)

BGNR TradingPte. Ltd.

(Singapore)

100% 100% 100% 100%

99%PT SamantakaBatubara(2),(3)

(Indonesia)

PT BlackGoldEnergy Indonesia(1)

(Indonesia)

99%

Annual Report 2019 BlackGold Natural Resources Limited 03

GROUP STRUCTURE

• Coal Sales/Purchase Agreement with PT Santosa Makmur Sejahtera Energy

• Coal Sales/Purchase Agreement with PT Soma Daya Utama

• Awarded tender by Indonesia’s state-owned electricity company, PT Perusahaan Listrik Negara (“PLN”) for coal supply of 500,000 tonnes per annum

• Successfully completed reverse takeover and listed on the Catalist board of the SGX-ST

2014

2015

2016• PT SB Concession commenced production and

signed a coal sales contract with a Riau state-owned enterprise

• Successfully completed first coal delivery to a Riau state-owned enterprise

• Signed a 5-year coal sales contract with PLN in respect of a 2 x 110 MW power plant in Riau province, Indonesia


CORPORATE MILESTONES

2017

2018

2019

• Produced an approximated 92,000 metric tonnes of coal

• Awarded 9,950,000 share awards under the BlackGold Employee Share Award Scheme

• Recorded gross profit of approximately US$340,000

• Produced approximately 346,000 metric tonnes of coal

• Recorded gross profit of US$2,195,585

• Increased sales volume by 95% in FY2019 as compared to FY2018

• New offtake agreement signed with a local pulp and paper plant

• Successfully completed first barge delivery to PLN

• Received a US$12.6 million purchase order for the supply of coal to an Indonesian state-owned cement company, PT Semen Padang


“Working closely with strategic partners, we believe

that the Group’s combined strengths in innovative

technology, operations expertise and market access

can create opportunities for sustainable, profitable

growth, while lowering the environmental impact of

our operations.”


CHAIRMAN’S STATEMENT

On behalf of the Board of Directors (the “Board” or “Directors”), it is my pleasure to present to you the annual report of the Company for the financial year ended (“FY”) 31 December 2019.

OVERVIEWFY2019 has been an encouraging year for the Group as we successfully delivered two new records in terms of revenue and coal production output from the Group’s mining operations, in spite of the ongoing global geopolitical tensions and volatility in the coal market. Having built strength and resilience into our business, the Group was able to navigate challenges during the 2019 operating environment amid strong leadership and a ramp up of production activities.

The Group started the year successfully securing a new offtake agreement (“Offtake Agreement”) with a local pulp and paper plant in Indonesia, whereby the Group delivered approximately 30,000 tonnes of coal per month from March 2019 to December 2019 in addition to the Group’s other existing customers.

PERFORMANCEDespite the challenging global macroeconomics, the Group managed to narrow its losses to US$1.5 million from US$18.9 million in FY2018.

The Group’s total coal production during FY2019 increased by 380% to approximately 0.35 million tonnes as compared to FY2018. Revenue for the year increased significantly by 95% to US$11.0 million mainly due to Offtake Agreement. The Group’s gross profits also improved significantly to US$2.2 million in FY2019 as compared to US$0.3 million in FY2018, while gross margins increased from 6.0% to 19.8% mainly due to economies of scale setting in as sales and production volumes increase.

As at 31 December 2019, PT New Resources Mine Consulting, an independent mining consultant commissioned by the Group to perform an assessment of the PT SB Concession, has prepared a summary of mineral reserves and resources which recorded 12.5 million tonnes of reserves and 110 million tonnes of resources. A -3% changes of reserves

DEAR SHAREHOLDERS,

is calculated after adjusting for depletion due to production of approximately 0.35 million tonnes from 1 January 2019 to 31 December 2019 (“Coal Production”). There is no change to the Company’s mineral resources as compared to the previous estimates published on 1 November 2019 except for the adjustment based on Coal Production which has no significant impact to the Company’s mineral resources.

LOOKING FORWARDGlobal demand for coal is still expected to increase in the coming years, driven by Southeast Asia, China, and India. Coal demand in Southeast Asia is forecasted to grow by more than 5% per year through 20241, led by Indonesia and Vietnam. The region’s strong economic growth will drive electricity and industrial consumption, which will be both fuelled in part by coal. In 2020, the government of Indonesia has set the coal production target at 550 million tonnes, 9.8% below the 610 million tonnes in 20192 to help bolster prices and state revenue.

While coal prices were relatively buoyant, at the beginning of 2020 the Group took the opportunity to capitalise on a range of opportunities identified in the thermal coal industry, thus adding diversity to the Group’s revenue mix and accelerate the growth of its business platform. Many developing economies in Asia require coal to sustain economic activities due to the availability and relative affordability of coal.

In January 2020, the Group has taken decisive actions to reshape its strategy within the resource industry, fundamentally positioning the Group towards new growth areas in the thermal coal industry, which will diversify the Group’s revenue base and strengthen its business foundation. Capitalising on new opportunities within the resource industry, the Group has developed a 4-prong strategy, consisting of building strategic partnerships, establishing offtake agreements, harnessing growth opportunities and strengthening the financial foundation.

The Group had, on 29 January 2020, signed a binding memorandum of understanding (“MOU”) with Sany Intelligent Mining Technology Co. Ltd (“Sany”), a wholly owned subsidiary of Sany Heavy Equipment International

1 https://www.iea.org/reports/coal-20192 https://www.bloomberg.com/news/articles/2020-01-09/indonesia-plans-to-cut-coal-output-to-bolster-prices-revenue


Holdings Co., Ltd. Under the MOU, parties have agreed to cooperate on certain activities including (i) the expansion of, and utilisation of Sany’s smart mining technology in markets comprising the ASEAN countries, Papua New Guinea and Australia, and (ii) development of coal mining and other resource mining related engineering, procurement and commissioning projects in the ASEAN countries, Papua New Guinea and Australia.

The Group also had successfully secured a new offtake agreement (“New Offtake Agreement”) to supply thermal coal to Xiamen Runpu Import and Export Co., Ltd (“Xiamen Runpu”). Under the New Offtake Agreement, the Group will supply at least 4.8 million tonnes of thermal coal for a 1-year duration. To support the New Offtake Agreement, the Group had secured a 10-year exclusive mining collaboration agreement to manage and operate four thermal coal concessions, with a land size of approximately 10,000 hectares, in East Kalimantan. Building on this momentum to scale up its business presence in the resource industry, the Group will proactively explore, evaluate and pursue new opportunities in other resource-rich countries

Working closely with strategic partners, we believe that the Group’s combined strengths in innovative technology, operations expertise and market access can create opportunities for sustainable, profitable growth, while lowering the environmental impact of our operations. Going forward, the Group will continue to focus its attention both on local and regional market, ready to tap the opportunities.

COVID-19While we are seeing increased sales from the Group’s new customers, due to a certain extent of uncertainties resulting from the Coronavirus Diseases 2019 (“Covid-19”), the Group remains cautious on the short-term market outlook but is confident that our efforts to strengthen our core businesses will allow us to weather through the tough market conditions and reap the benefits in the longer term amid the Covid-19 pandemic. The Group will proactively manage the business and take the necessary actions to ensure that the Group’s long-term business prospects remain robust whilst prioritising the health and safety of our employees, business partners, and all other stakeholders.

ACKNOWLEGEMENTThe Group’s achievements over the past year would not be possible without the dedication and hard work of our staff and management team. On behalf of the Board, I would like to express my gratitude to all staff and the management team. I would also like to thank our shareholders for their continued support and trust, as well as to our business partners, customers and suppliers for their unwavering support.

I would also like to thank my fellow Board members for their guidance and contributions, as we continue to strengthen our business fundamentals to take the Group to greater heights and a better future.

SOH SAI KIANGIndependent Non-Executive Chairman


CHAIRMAN’S STATEMENT

09Annual Report 2019 BlackGold Natural Resources Limited

BOARD OF DIRECTORS

SOH SAI KIANG(Independent Non-Executive Chairman)

ANDREAS RINALDI(Executive Director and Chief Executive Officer)

Mr Soh Sai Kiang (“Mr Soh”) was appointed as an Independent Director of the Company on 17 September 2019, and was re-designated to Independent Non-Executive Chairman on 29 November 2019. Mr Soh was the Head of Internet Trading in Lum Chang Securities Pte Ltd (subsequently known as DBS Vickers Securities Pte Ltd) where he was responsible for managing the internet trading business for the company. In 2001, Mr Soh joined UOB Kay Hian Pte Ltd as the Head of Business Development and subsequently, rose to the rank of Director of Capital Markets (Singapore) where he now handles capital fund raising and debt financing for listed and non-listed companies. Mr Soh is also the lead independent director of Sin Heng Heavy Machinery Ltd, which is listed on the Mainboard of the Singapore Exchange Securities Trading Limited. Mr Soh graduated with a Bachelor of Arts (Merit) degree in Economics and Political Science from the National University of Singapore in 1993.

Mr Andreas Rinaldi (“Mr Rinaldi”) was appointed as CEO Designate of the Group on 16 October 2019, and was subsequently re-designated as Executive Director and Chief Executive Officer on 29 November 2019. Mr Rinaldi has been with the Group since 2005, where he assumed the role as an Executive Director of the Company’s Indonesian subsidiaries, PT Samantaka Batubara, PT Ausindo Prima Andalas, and PT Ausindo Andalas Mandiri. Prior to joining the Group Mr Rinaldi held the position of Director at Sarmi Papua Asia Oil Ltd and PT Inti Nickelindo Resources where he led and oversaw the companies’ strategic direction and business plan. Mr Rinaldi graduated from Atma Jaya University with an Associate Degree in English Education.

BANGUN MADONG PARULIAN SAMOSIR(Independent Director)

Mr Bangun Madong Parulian Samosir (“Mr Samosir”) was appointed as an Independent Director of the Company on 10 March 2015 and brings to the Group an extensive mining and entrepreneurial experience from a portfolio of senior positions held in the Indonesian mining and construction industry.

Mr Samosir has been the adviser of PT Pamapersada Nusantara since 2007. Prior to his appointment as adviser, from 1994 to 2007, he had been engineering division head and operational auditor in PT Pamapersada Nusantara. From 1983 to 1994, he began his career at PT Freeport Indonesia Inc. as a mine engineer trainee, gradually rising through the ranks to assistant chief engineer, serving in both the surface and mining divisions of the organisation. Mr Samosir graduated with a Bachelor of Mine Engineering from Bandung Institute of Technology in 1982.


LIM CHEE SAN (Independent Director)

Mr Lim Chee San (“Mr Lim”) was appointed as a Lead Independent Director of the Company on 31 July 2019, and was subsequently re-designated to Independent Director on 29 November 2019. Mr Lim has been an accountant, a banker and a lawyer at different times during the last 35 years. He has since 2004 been running his own law firm, TanLim Partnership which specializes in litigation, corporate law and conveyancing. Before he started his current law practice, he was the Head of Banking Operations in a large regional bank. He also has many years of experience as an auditor in large international accounting firms. He is a barrister-at-law, a chartered certified accountant, and a chartered information technology practitioner. He was among the top candidates in his accountancy and law examinations.

WAHYU MAHADI (Independent Director)

Mr. Wahyu Mahadi (“Mr Mahadi”) was appointed as an Independent Director of the Company on 31 July 2019. Mr Mahadi is currently general manager of the national roll-out delivery and implementation division which specialises in project delivery and quality assurances for PT. Hutchison 3 Indonesia or known as CK Hutchison Group Telecom Holding Hongkong. Prior to his tenure at PT. Hutchison 3 Indonesia in 2006, Mr. Mahadi joined PT. Alcatel Indonesia in 1995 as testing commissioning engineer and was assigned throughout South East Asian countries (Malaysia, Thailand and Brunei). Mr. Mahadi graduated with a Bachelor of Electrical Engineering from National Institute of Science and Technology of Indonesia in 1995.

CHNG HEE KOK (Independent Director)

Mr Chng Hee Kok (“Mr Chng”) was appointed as an Independent Director of the Company on 17 September 2019. Mr Chng had served as the Chief Executive Officer of Scotts Holdings Limited, Yeo Hiap Seng Limited, Hartawan Holdings Ltd., HG Metals Manufacturing Ltd, and LH Group Ltd. He was a Member of Parliament of Singapore from 1984 to 2001. Currently he sits on the boards of a number of listed companies which includes Ellipsiz Ltd, Samudera Shipping Line Limited, United Food Holdings Ltd, Luxking Group Holding Ltd, The Place Holding Ltd, and Full Apex (Holdings) Limited. He had previously served on the boards of public and private companies, including, inter alia, Sentosa Development Corporation and the Singapore Institute of Directors. Mr Chng was awarded a Merit Scholarship by the Singapore Government and graduated with a BEng (First Class Honours) from the University of Singapore in 1972. He also holds a MBA from the National University of Singapore.


KEY MANAGEMENT

Mr Risa Herisana (“Mr Herisana”) began his career at BlackGold in 2012 where he was subsequently appointed as Head of Sales and Marketing of the Group in 2015 and continues to be responsible for the development and implementation of the Group’s sales strategy and marketing activities. His core responsibilities include achieving consistent sales increases over a target time period as well as engaging a portfolio of both local and international clientele. Mr Herisana had previously worked as a project manager at PT Karya Anugrah Kusuma, where he developed his understanding of coal logistics and built his contacts within the industry.

Mr Herisana graduated with a Bachelor of Management from Widyatama University, Bandung in 2004.

RISA HERISANAHead of Sales and Marketing

Mr Suherman Budiono (“Mr Budiono”) was appointed as Chief Financial Officer (“CFO”) of the Group on 31 July 2019. Mr Budiono leads the finance, accounting, tax, analysis and financial reporting of the Group’s operations. He is also responsible for improving the Group’s financial control systems and policies. Mr Budiono was CFO of the Group from January 2012 to September 2017.

Prior to joining the Group in 2012, Mr Budiono served as the head of finance & accounting at PT Vitadaya Harapan from August 2009 to December 2011, where he led the financial control, financial reporting, as well as tax planning and analysis of the company. He was responsible for developing the financial control system and policy of PT Vitadaya Harapan, including its integration with the company site office system.

Mr Budiono graduated with a Bachelor of Accounting and Economics from Wijaya Kusuma University in August 1986. He is currently a member of the Ikatan Akuntan Indonesia, which is a member of the International Federation of Accountants.

SUHERMAN BUDIONOChief Financial Officer


Mr Hanggono Sakti (“Mr Sakti”) continues to hold the position of Head of Mining and Exploration of the Group since his appointment in 2015. He is responsible for leading, coordinating, and supervising the exploration activities in the Group’s concession. Mr Sakti manages a team of geologists and technical specialists in completing a wide range of geological tasks.

Mr Sakti is a qualified geologist and has been actively involved in numerous coal exploration programmes ranging from field geology, drilling, data management, programme direction and management. He has held key roles in companies such as PT Karya Anugrah Kusuma from July 2011 to February 2012, PT Adidaya Tangguh from April 2011 to June 2011, and PT Indika Energy Group from June 2008 to February 2010.

Mr Sakti graduated with a Bachelor in Geology from the Sekolah Tinggi Teknologi Nasional Yogyakarta in April 2006.

HANGGONO SAKTIHead of Mining and Exploration


BUSINESS REVIEW

INCOME STATEMENT

Revenue & Gross Profits

Revenue increased by US$5.4 million due to an increase

in the number of customers. In 2019, the Group had

increased the production of coal by 253,000 tonnes, an

approximate 274% rise from 2018.

The Group recorded a gross profit of US$2.2 million, up

from US$0.3 million in 2018, which was mainly due to the

increased sale volumes. Coupled with higher operational

efficiencies achieved during the year, a better gross profit

margin of 19.8% was attained in 2019, against a lower

6.0% gross profit margin in 2018.

Key Expenses

Administrative expenses decreased by US$1.5 million.

Staff costs and cost of share awards were decreased

by US$0.5 million due to a reduction in headcount;

professional fees had decreased by US$0.2 million from

a reduction in professional services engaged; one-off

geology and surveyor fees amounting to US$0.6 million

incurred in 2018 which did not recur during 2019 and

decrease of US$0.2 million in rental expenses from

adoption of SFRS(I) 16 whereby leases expenses are now

capitalized and depreciated.

Finance costs increased by US$0.4 million from new

financing facilities to finance the Group’s accounts

receivable collection cycle. The higher financing costs

were largely driven by increased sales in 2019.

Other expenses had decreased by US$13.9 million from

a one-off impairment loss in 2018 on mining properties,

prepayments, property, plant and equipment totaling

US$12.7 million. This impairment loss arises from a prior

year restatement to write-down the carrying value of assets

in relation to the Group’s PT Samantaka Batubara mine

concession. More detail on the restatement can be found

under Note 34 of the Notes to the Financial Statements.

The remaining decrease of US$1.2 million was accounted

for by a separate one-off impairment loss on exploration

and evaluation expenditure in 2018.

Loss after tax

As a result of the above factors, the Group recorded a net

loss of US$1.5 million during the year.


BALANCE SHEET

Current assets increased by US$1.7 million mainly due to

the following:

(i) An increase in trade and other receivables of

approximately US$3.4 million from increased sales

during 2019;

(ii) An increase in deposits and prepayment of

approximately US$0.3 million from more prepayments

made to vendors as a result of increased production

activities;

(iii) A decrease in cash and cash equivalents of

approximately US$0.5 million from payments to

vendors for increased works on production; and

(iv) A decrease in inventories of approximately US$1.5

million due to faster inventory turnover from increased

sales.

Non-current assets increased by US$0.1 million from a net

increase in property, plant and equipment on adoption of

SFRS(I) 16.

Current liabilities increased by US$2.4 million, mainly due

to an increase of US$1.3 million in accrued operating

expenses from higher levels of business activities. In

addition, borrowings had increased by US$1.7 million

for accounts receivable financing which had arisen from

increased sales during 2019. Lease liabilities increased by

US$0.1 million from adoption of SFRS(I) 16. These were

partially offset by a US$0.7 million from payment of trade

and other payables.

Non-current liabilities increased by US$0.2 million, mainly

due to an increase in provision of mine reclamation and

rehabilitation for the PT Samantaka Batubara mine

concession.

CASH FLOW

In 2019, cash flow used in operating activities was US$2.4

million. It comprises operating losses of US$0.6 million,

adjusted for net outflows from changes in working capital

of approximately US$1.8 million.

Net cash used in investing activities amounting to US$0.1

million mainly arose from additions to mining properties.

Net cash provided by financing activities in 2019 amounting

to approximately US$2.1 million were mainly due to

proceeds from borrowings of US$11.5 million, offset by

repayment of borrowings amounting to US$9.9 million and

payment for interest expenses of US$0.2 million.


BUSINESS REVIEW


COAL RESERVES AND RESOURCES

There has been no material change in the Group’s coal resources and reserves since they were last reported in the Independent Qualified Person’s Report dated 1 November 2019.

Date of report: 29 June 2020Date of previous report: 1 November 2019

Mineral Resources and Reserves Summary Tables

Name of Asset/Country: PT SB Concession/Indonesia

Gross Attributable to Licence(1) Net Attributable to Issuer

Category Mineral TypeTonnes

(millions)(3) Grade/RankTonnes

(millions)(3) Grade/RankChange from

Previous Update (%)(5)

RESERVES(4)

Proved Coal 3.5 Lignite 3.5 Lignite –2%

Probable Coal 8.9 Lignite 8.9 Lignite –3%

Total Coal 12.5 Lignite 12.5 Lignite –3%

RESOURCES(2&4)

Measured Coal 24 Lignite 24 Lignite –

Indicated Coal 61 Lignite 61 Lignite –

Inferred Coal 23 Lignite 23 Lignite –

Total Coal 110 Lignite 110 Lignite –

Effective date of Resources and Reserves estimates: 31 December 2019

Notes:(1) Licence refers to PT SB’s Production Operations (IUP) licence.(2) Resources are inclusive of Reserves.(3) The Coal Resource estimates are rounded to two significant figures while Coal Reserves presented are rounded to the nearest one hundred thousand to

reflect the accuracy of the estimates. Minor discrepancies are due to rounding and are not considered material by PT New Resource Mine Consulting.(5) The date of previous update was for an effective date of 31 December 2018.(6) -3% change of Reserves is calculated after adjusting for production of approximately 0.35 million tonnes from 1 January 2019 to 31 December 2019.(7) The total Mineral Resources as at 31 December 2019 is the same as at 1 January 2019 except for the adjustment in production numbers stated in Note 6

which has no significant impact to the Mineral Resources.

A total of approximately 0.35 million tonnes of coal was produced during FY2019. Total cash expenditure incurred for production activities in FY2019 amounted to US$1.0 million.

Name of Qualified Person for Resources: William (Bill) ParkDate: 31 December 2019 (effective date of Resources estimate)Professional Society Affiliation/Membership: BSc (Geology), BEcon, MAusIMM

Name of Qualified Person for Reserves: Chris SpiliopoulosDate: 31 December 2019 (effective date of Reserves estimate)Professional Society Affiliation/Membership: BE(Mining), MAusIMM

The information in this report that relates to Coal Resources is based on information compiled by Mr William (Bill) Park, a qualified person who is a Member of The Australasian Institute of Mining and Metallurgy. The information in this report that relates to Coal Reserves is based on information compiled by Mr Chris Spiliopoulos, a qualified person who is a Member of The Australasian Institute of Mining and Metallurgy.

Mr Park and Mr Spiliopoulos are employed by PT New Resource Mine Consulting and undertake the annual reporting of Coal Resources and Reserves for the Company.

Mr Park and Mr Spiliopoulos will be paid a consulting fee for the preparation of the statement of coal Resources and coal Reserves by BlackGold Natural Resources Limited. No other relationship which could create a potential for conflict of interest exists.

Both Mr Park and Mr Spiliopoulos have sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Park and Mr Spiliopoulos also satisfy the requirements for a qualified person as per Catalist Rules 1204(23). Mr Park and Mr Spiliopoulos consent to the inclusion in this report of the matters based on their information in the form and context in which it appears.


The Board of Directors (the “Board” or “Director”) of BlackGold Natural Resources Limited (the “Company”, and together with its subsidiaries, the “Group”) strongly believes that good corporate governance is important for the long-term sustainability of the Company’s business and performance. The Company is committed to the highest standards of corporate governance and supports the principles of transparency, integrity and accountability advocated by the Singapore Exchange Securities Trading Limited (“SGX-ST”) so as to create value for its stakeholders.

This report describes the corporate governance practices adopted by the Group during the financial period from 1 January 2019 to 31 December 2019 (“FY2019”) with specific reference to each of the principles and provisions set out in the Code of Corporate Governance 2018 (“Code”) (“Report”). The Board confirms that, for FY2019, the Group has complied to the principles as set out in the Code, and where there were deviations to provisions of the Code, appropriate explanations are provided.

The Company will also continue to enhance its corporate governance practices appropriate to the conduct and growth of its business and to review such practices from time to time to ensure compliance with the requirements of the Listing Manual Section B: Rules of Catalist (the “Catalist Rules”) of the SGX-ST.

THE BOARD’S CONDUCT OF ITS AFFAIRS

Principle 1: The Company is headed by an effective Board which is collectively responsible and works with Management for the long-term success of the company.

(1) Provision 1.1 (Principal functions of the Board)

The Board comprises six (6) directors, which consists one executive director and five independent directors, all of whom are from different disciplines and bring with them diversity of experience which will enable them to contribute effectively to the Company. The Board provides entrepreneurial leadership, sets the strategic direction for the Group, ensures that the necessary financial and human resources are in place, reviews management (“Management”) performance, and guides Management, led by the Chief Executive Officer (“CEO”), to achieve the desired outcomes. The Board is also responsible for ensuring that Management has a framework of internal and risk management controls in place, staying aligned to good practices in relation to financial reporting, compliance and corporate governance, while taking into consideration the interest of its shareholders.

In addition to carrying out its statutory responsibilities, the principal functions of the Board include:

• Guiding and formulating the Group’s overall long-term strategic plans, performance objectives as well as operational initiatives which include ensuring that the required financial and human resources are available for the Group to meet its objectives;

• Establishing a framework of prudent and effective controls to assess the adequacy of internal controls, risk management, financial reporting and compliance;

• Reviewing the performance of Management;

• Setting the Company’s values and standards (including ethical standards and code of conduct), and ensuring proper accountability within the Group such that obligations to shareholders and other stakeholders are understood and duly met; and

• Assuming responsibility for corporate governance and ensuring compliance with the Catalist Rules, Companies Act (Chapter 50) of Singapore and other relevant statues and regulations.

CORPORATE GOVERNANCE REPORT


The Board adopted a set of ethical values and standards which establishes the fundamental principles of professional and ethical conduct expected of the Directors in the performance of their duties. Each Director is required to promptly disclose any conflicts or potential conflicts of interest, whether direct or indirect, in relation to any transaction or matter discussed and contemplated by the Group. Where a potential conflict of interest arises, the Director concerned will recuse himself from discussions and decisions involving the issue of conflict and refrains from exercising any influence over other members of the Board in respect of the issue.

(2) Provision 1.2 (Directors’ orientation and training)

Newly appointed Directors to the Board are issued with a formal letter of appointment that describes their duties, responsibilities and obligations as a Director. All Directors exercise due diligence and independent judgement, and are obliged to act in good faith at all times by considering the interests of the Company. Upon appointment, the Directors are appropriately briefed by Management who would furnish them an overview of the Company’s business, operations, regulatory requirements as well as the key policies and Board processes.

In accordance with recent revisions to Catalist Rules, with effect from 1 January 2019, the Nominating Committee (“NC”) will ensure that any new Director appointed by the Board, who has no prior experience as a Director of an issuer listed on the SGX-ST, must undergo mandatory training in the roles and responsibilities of a Director as prescribed by the SGX-ST. Of the five Directors appointed in FY2019, Mr Wahyu Mahadi (“Mr Mahadi”) and Mr Andreas Rinaldi (“Mr Rinaldi”) do not have prior experience as Directors of listed issuers on the SGX-ST. The Company will arrange for Mr Rinaldi to attend the mandatory training courses within 1 year from his appointment as Executive Director on 29 November 2019. Mr Mahadi will retire at the forthcoming Annual General Meeting (“AGM”) under Article 95 of the Constitution of the Company and will not be seeking for re-election.

All Directors are encouraged to keep themselves abreast of the latest developments relevant to the Company through the attendance of seminars, conferences and training courses such as those organised by the Singapore Institute of Directors (“SID”), Accounting and Corporate Regulatory Authority (“ACRA”) and/or the SGX-ST. The Company makes arrangements for and funds the Directors to attend such training. Management (with the assistance of external consultants, where considered appropriate) provides the Directors with information relevant to the Group’s business including information to keep them apprised of issues and developments, both locally and in other jurisdictions, pertinent to the Group’s businesses, changes in laws, listing rules or accounting matters and regulatory and compliance issues. Additionally, Directors are at liberty to request for further explanations, briefings or information from Management as and when required.

(3) Provision 1.3 (Matters requiring Board approval)Provision 1.4 (Delegation by the Board)

The functions of the Board are carried out by the Board or delegated by it to various Board Committees. The Board has established the following Board Committees: Audit Committee (“AC”), NC and Remuneration Committee (“RC”) (collectively, the “Board Committees”). Each Board Committee has written terms of reference which includes the authority to examine issues relevant to its terms of reference and to approve and/or make recommendations to the Board for consideration. A summary of the terms of reference and the activities of the Board Committees are more particularly described in their respective sections of this Report.

Whilst the Board Committees are delegated with certain responsibilities, ultimate responsibility and final decision on all matters remains with the Board. The effectiveness of each Board Committee is constantly monitored.



Matters specifically referred to the Board for its approval include, but are not limited to, the following:

• Quarterly results announcements;

• Annual results and accounts;

• Declaration of interim dividends and proposal for final dividends;

• Convening of shareholders’ meetings;

• Authorisation for merger and acquisition transactions; and

• Authorisation of major transactions.

(4) Provision 1.5 (Board meetings, attendance and multiple commitments)

The Board of Directors meet on a regular basis, at least four times a year, to review and approve the financial results of the Group and receive key reports from both Management and external professionals. In addition, the Board also addresses key policy matters pertaining to the strategic direction of the Group, risk reports and key policies, annual budget and any capital structuring. Ad-hoc meetings are convened as and when warranted by circumstances and deemed necessary. When physical meetings are not possible, the Board and Board Committees may also make decisions by way of circulating written resolutions. Under the Company’s constitution (“Constitution”), Board meetings are permitted to be held by way of telephonic or video conferencing or by similar means of communication equipment.

The attendance by each Director at the Board and Board Committees meetings held during FY2019 are disclosed as follows:

BoardAudit

CommitteeNominatingCommittee

Remuneration Committee

Number of meetings held in FY2019

4 4 1 1

Name of DirectorNo. of

meetingsheld

No. of meetingsattended

No. of meetings

held


No. of meetings

held


No. of meetings

held


Philip Cecil Rickard 4 4 4 4* 1 – 1 –

James Rijanto 4 2 4 2* 1 – 1 –

Nandakumar PonniyaServai

4 2 4 2 1 – 1 –

Gerald Lim Thien Su 4 2 4 2 1 – 1 –

Bala Chandran 4 2 4 2 1 – 1 –

Bangun Madong Parulian Samosir

4 4 4 4* 1 1 1 1

Lim Chee San 4 2 4 2 1 1 1 1

Wahyu Mahadi 4 2 4 2* 1 – 1 1

Chng Hee Kok 4 1 4 1 1 1 1 1

Soh Sai Kiang 4 1 4 1 1 1 1 1

Andreas Rinaldi 4 1* 4 1* 1 – 1 –

Notes:

*By invitation



During FY2019, the Company experienced the following changes to the Board:

• Resignation of Mr James Rijanto as Chief Investment Officer and Executive Director with effect from 31 July 2019;

• Resignation of Mr Nandakumar Ponniya Servai as Lead Independent Director, Chairman of the NC and RC and member of the AC with effect from 31 July 2019;

• Resignation of Mr Gerald Lim Thien Su as Independent Director, Chairman of the AC and member of the RC with effect from 31 July 2019;

• Resignation of Mr Bala Chandran as Independent Director, member of the AC, NC and RC with effect from 31 July 2019;

• Appointment of Mr Lim Chee San (“Mr Lim”) as Lead Independent Director, Chairman of the AC, NC and RC with effect from 31 July 2019. On 29 November 2019, he was re-designated from Lead Independent Director to Independent Director and stepped down as chairman of the NC and the RC while remaining as a member of both Board Committees;

• Appointment of Mr Mahadi as Independent Director, member of the AC and RC with effect from 31 July 2019. Mr Mahadi had relinquished his position as a member of the RC on 29 November 2019 while remaining as an Independent Director and a member of the AC;

• Appointment of Mr Chng Hee Kok (“Mr Chng”) as Independent Director, member of the AC, NC and RC with effect from 17 September 2019. On 29 November 2019, he was appointed as chairman of the RC while remaining a member of the AC and NC;

• Appointment of Mr Soh Sai Kiang (“Mr Soh”) as Independent Director, member of the AC, NC and RC with effect from 17 September 2019. On 29 November 2019, he was re-designated Independent Non-Executive Chairman of the Board and was appointed as chairman of the NC while remaining as a member of the AC and RC;

• Retirement of Mr Philip Cecil Rickard (“Mr Rickard”) as a Director, Executive Chairman of the Board and member of NC with effect from 29 November 2019;

• Appointment of Mr Rinaldi as Chief Executive Officer and Executive Director with effect from 29 November 2019;

Subsequent to FY2019, the Company experienced the following changes to the composition of the Board Committees:

• Mr Mahadi had relinquished his position as a member of the AC with effect from 25 February 2020. Mr Mahadi remains as Independent Director of the Company; and

• Mr Bangun Madong Parulian Samosir (“Mr Samosir”) had relinquished his position as member of the AC, NC, and RC with effect from 25 February 2020. Mr Samosir remains as Independent Director of the Company.

All Directors are required to declare their board appointments. When a Director has multiple board representations, the NC will consider whether the Director is able to adequately carry out his/her duties as a Director of the Company, taking into consideration the Director’s number of listed company board representations and other principal commitments. The NC has reviewed and is satisfied that notwithstanding multiple board appointments, the Directors with multiple board appointments, namely Mr Lim, Mr Soh and Mr Chng, have been able to devote sufficient time and attention to the affairs of the Company to adequately discharge their duties as Director of the Company.



(5) Provision 1.6 (Access to information)Provision 1.7 (Access to Management, Company Secretary and External Advisers)

Management provides Directors with periodic management financial information relating to the Group and quarterly updates are provided to the Board. Board papers are prepared for each meeting of the Board and are circulated at least four days ahead of each meeting to allow enough lead time for Directors to peruse and review the items tabled for the meetings. Management is required to provide the Board with papers containing sufficient information pertaining to the agenda (including, where applicable, budgets, forecasts and analyses) to assist the Directors’ review of the issues to be considered at Board meetings and to facilitate discussion at such meetings. Directors are at liberty to request from Management additional information as and when required to make an informed decision.

The Directors have separate and independent access to the Company Secretary. The Company Secretary attends all Board meetings and her responsibilities include, amongst other, checking that board procedures are followed, applicable rules and regulations, including the listing rules and the Code, are complied with and that minutes of meetings are properly recorded. The Company Secretary is also tasked with handling information flow within the Board and its Committees. The Constitution of the Company provides that the appointment and removal of the Company Secretary is a matter for the Board as a whole.

If Directors, whether as a group or individually, in furtherance of their duties need independent professional advice, assistance is available to help them obtain such advice at the Company’s expense.

BOARD COMPOSITION AND GUIDANCE

Principle 2: The Board has an appropriate level of independence and diversity of thought and background in its composition to enable it to make decisions in the best interests of the company.

(1) Provision 2.1 (Board Independence)Provision 2.2 (Majority independent Directors where Chairman is not independent)Provision 2.3 (Majority non-executive Directors in a Board)Provision 2.4 (Board composition and diversity)

The Board currently comprises six Directors, of whom five (constituting more than half of the Board) are Independent Non-Executive Directors, details of the directorships as at the date of this Report are as follow:

Name of Director DesignationAudit

CommitteeNominatingCommittee

RemunerationCommittee

Soh Sai Kiang Independent Non-Executive Chairman

Member Chairman Member

Andreas Rinaldi Executive Director and Chief Executive Officer

– – –

Lim Chee San Independent Director Chairman Member Member


Independent Director – – –

Wahyu Mahadi Independent Director – – –

Chng Hee Kok Independent Director Member Member Chairman



With five Independent Directors, which make the majority of the Board, the Board is able to exercise objective and independent judgement on the Group’s affairs. There is no individual or small groups of individuals which dominates the Board’s decision-making.

The NC reviews the size of the Board from time to time with a view to determine the impact of its number on its effectiveness. The NC decides on what it considers an appropriate size, taking into account the nature and current scope of the Company’s operations, the requirements of the business of the Company and the need to avoid undue disruptions from changes to the composition of the Board and Board Committees. The Board is of the opinion that, given the scope and nature of the Group’s operations, the present size of the Board is appropriate for effective decision making.

The Board consists of individuals possessing a wide range of competencies, skills, experience and qualifications which are extensive and complementary, and include accounting, finance, business, legal as well as industry expertise and knowledge to effectively provide oversight of, and guide the Company’s strategic direction. Profiles of the Directors are set out in the “Board of Directors” section of the Annual Report. The NC is satisfied that the current Board comprises persons who as a group, has core competencies in accounting and finance, business and management experience, industry knowledge, strategic planning experience and customer-based experience or knowledge, required for the Board to be effective.

Currently, the Company does not have a Board diversity policy as provided by provision 2.4 of the Code, but the Board conducts an annual review to assess if the existing attributes and core competencies of the Board are complementary and contributes to the efficacy of the Board. This enables the Board to maintain or enhance balance and diversity within the Board. In reviewing Board composition and succession planning, the NC will consider the benefits of all aspects of diversity, including diversity of background, experience, gender, age and other relevant factors. These differences will be considered in determining the optimum composition of the Board and when possible should be balanced appropriately. Although none of the Directors are female, the Company does not discriminate against gender diversity within the Board nor actively sets targets on the proportion of males to females sitting on the Board. The Board does not rule out the possibility of the appointment of a female Director if a nominated candidate is a good fit and possesses the qualifications required for the Board to effectively carry out its duties collectively. The Board is of the view that its current practices are consistent with the aim of principle 2 of the Code.

All Independent Directors are required to confirm their independence by completing a declaration of Independence Form which is drawn up in accordance with the Code’s definitions, Catalist Rules and Practice Guidance to the Code, and submitted to the NC for its assessment of the independence of each Director.

Based on the confirmation of independence submitted by the Independent Directors, the NC considers Mr Soh, Mr Chng, Mr Lim, Mr Samosir and Mr Wahyu as independent on the following basis:

(a) The Independent Directors: (i) are not employed by the Company or any of its related corporations for the current or any of the past three (3) financial years; and (ii) do not have an immediate family member who is employed or has been employed by the Company or any of its related corporations for the past three (3) financial years, and whose remuneration is determined by the RC.

(b) None of the Independent Directors has served on the Board beyond nine (9) years from the date of first appointment.

(c) None of the Independent Directors and their immediate family member had in the current or immediate past financial year (i) provided or received significant payments or material services to and/or from the Group when aggregated over any financial year in excess of S$50,000 for services other than compensation for board service; or (ii) was a substantial shareholder, partner, executive officer or a director of any organization which provided or received significant payments or material services to and/or from the Group when aggregated over any financial year in excess of S$200,000 for services rendered.

(d) None of the Independent Directors are directly associated with a substantial shareholder of the Company.



There was no Director who has served on the Board beyond nine years from the date of his first appointment. Should there be any Director who has served on the Board beyond nine years, his independence will be subject to more rigorous review, taking into account the need for progressive refreshing of the Board.

(2) Provisions 2.5 (Meeting of non-executive Directors without Management)

The Non-Executive Directors, led by Mr Soh, communicate at Board Committee meetings as and when necessary without the presence of Management and are also provided with the opportunity annually to meet without Management’s presence. From time to time, they review and provide feedback to Management of their views including on the Group’s operations and processes. The Independent Directors of the Company may communicate periodically without the presence of the other Directors as and when they see the fit for issues to be discussed separately from the entire Board.

CHAIRMAN AND CHIEF EXECUTIVE OFFICER

Principle 3: There is a clear division of responsibilities between the leadership of the Board and Management, and no one individual has unfettered powers of decision-making.

(1) Provision 3.1 (Separation of the role of the Chairman and the CEO)Provision 3.2 (Role of the Chairman and the CEO)

The roles of Chairman and Chief Executive Officer of the Company are separate. Mr Soh is the Chairman of the Board and is an Independent Non-Executive Director. Mr Rinaldi holds the role of CEO. Both Mr Soh and Mr Rinaldi are independent of each other and do not hold any immediate family member relationship.

Mr Soh performs his duties as Chairman and Independent Director of Company and is responsible for, inter alia, leading the Board to ensure its effectiveness, setting agenda for Board meetings, and ensuring adequate time for discussion, promoting openness and discussion during Board meetings, ensuring that Directors receive complete, adequate and timely information, ensuring effective communication with the shareholders, encouraging constructive relations within the Board and between the Board and Management, facilitating effective contributions from the Directors and promoting high standards of corporate governance.

As CEO of the Company, Mr Rinaldi is responsible for the leadership and overall management of the affairs of the Company and overall oversight of the Group in accordance with the business considerations and strategies set out by the Board. He oversees execution of the Group’s corporate and business strategies and is responsible for the day-to-day running of the business. All major proposals and decisions made by the CEO are discussed and reviewed by the Board. Mr Rinaldi’s performance and appointment to the Board is reviewed periodically by the NC and his remuneration is reviewed periodically by the RC.

The Board believes that the current composition of the Board is able to make precise objective and prudent judgement on the Group’s corporate affairs. As the AC, NC, and RC consist of all Independent Directors, the Board is of the view that there are sufficient safeguards and checks to ensure that the process of decision making by the Board is independent and are based on collective decisions without any individual exercising any considerable concentration of power or influence. No one individual director has unfettered powers of decision making, as reflected in the disclosure under Principle 1.

(2) Provision 3.3 (Lead Independent Director)

No Lead Independent Director has been appointed to the Board as the Chairman is independent and not conflicted.



BOARD MEMBERSHIP

Principle 4: The Board has a formal and transparent process for the appointment and re-appointment of directors, taking into account the need for progressive renewal of the Board.

(1) Provisions 4.1 and 4.2 (Roles and composition of the NC)

As at the date of this Report, the NC is led by Mr Soh, and comprises three Directors, all of whom are independent.

The NC is scheduled to meet at least once a year, or as and when necessary. Under its written terms of reference, the NC’s duties and functions include:

• Reviewing and making recommendations to the Board on board appointments and re-nomination having regard to the Directors’ contribution and performance;

• Review of succession plans for Directors, in particular the appointment and/or replacement of the Chairman, the CEO and key Management;

• Reviewing the Board structure, size and composition having regard to the scope and nature of the operations and the core competencies of the Directors as a group;

• Determining annually whether a Director is independent, guided by guidelines of the Code and the Catalist Rules;

• Assessing if a Director is able to and has been adequately carrying out his duties as a Director of the Company, especially where he has multiple board representations;

• Recommending the nomination of Directors who are retiring by rotation to be put forward for re-election;

• Proposing objective criteria to the Board for approval and implementation, to evaluate the effectiveness of the Board as a whole and its Board Committees and the contribution of each Director to the effectiveness of the Board; and

• Review of training and professional development programmes for the Board and its Directors.

Each member of the NC shall abstain from voting on any resolutions, making any recommendations and/or participating in any deliberations of the NC in respect of the assessment of his performance, his independence, or his re-nomination as a Director.

(2) Provision 4.3 (Board renewal)

The NC is responsible for identifying candidates and reviewing all nominations for the appointments of new Directors. On an annual basis, the NC will conduct a review of the composition of the Board in terms of the size and mix of skills and qualifications of the Board members. Where necessary, the search and nomination process for new Directors will be through search companies, contacts or recommendations that go through the normal selection process. In the selection and nomination of new Directors, the NC establishes the key attributes that an incoming Director should have, based on attributes of existing Board members and the requirements of the Company.

The NC shall assess the suitability of the candidate based on his skills, knowledge and experience; and ensure he/she is aware of the expectations and the level of commitment required, before recommending the candidate to the Board. Upon review and recommendation by the NC to the Board, the new Director will be appointed by way of passing a board resolution.



Each member of the Board holds office pursuant to the provisions of the Constitution and thereafter, shall be eligible for re-election unless disqualified from holding office. Article 94 of the Constitution requires that one-third of the Board shall retire and subject themselves to re-election by shareholders at every annual general meeting of the Company (“AGM”). Separately, pursuant to Article 95 of the Constitution, any vacancy occurring in the Board of Directors may be filled up by the Directors or the Members in the general meeting. A Director so appointed by the Directors shall retire from office at the next following general meeting but shall be eligible for re-election.

The following sets forth the respective dates of appointment and the dates of last re-election of each Director:

Name of Director

Date of Initial

Appointment

Date of Last

Re-election

Directorships inOther Listed Companies Other Principal

CommitmentsPresent

Past(Last 5 Years)

Soh Sai Kiang

17 September

2019

29 November

2019

• Sin Heng Heavy Machinery Ltd

• Republic Healthcare Limited

Artivision Technologies Ltd

UOB Kay Hian Pte Ltd (Director of Capital Markets Group)

Lim Chee San

31 July 2019 29 November

2019

• Resource Prima Group Limited (formerly known as

• Sky One Holdings Limited)

• Hupsteel Limited• Soon Lian

Holdings Limited

TanLim Partnership (Partner)


10 March 2015

25 April 2018

Nil Nil PT PamapersadaNusantara (Advisor)

Wahyu Mahadi

31 July 2019 29 November

2019

Nil Nil PT Hutchison 3 Indonesia Telecommunication (General Manager)

Andreas Rinaldi

29 November 2019

– Nil Nil Nil

Chng Hee Kok

17 September

2019

29 November

2019

• Ellipsiz Ltd• Samudera

Shipping Line Ltd• Full Apex Holdings

Ltd• Luxking Group

Holdings Ltd• United Food

Holdings Ltd• The Place

Holdings Ltd• Metech

International Limited

• Infinio Group Ltd (currently known as Rich Capital Holdings Limited)

• China Flexible Packaging Holdings Limited

• LH Group Ltd(currently known as Pacific Star Development Limited)

• Pacific CenturyRegional Developments Limited

• Chaswood Resources Holdings Ltd

Nil



Mr Samosir and Mr Mahadi shall retire at the forthcoming AGM in accordance with Article 94 of the Constitution while Mr Rinaldi shall retire at the forthcoming AGM in accordance with Article 95 of the Constitution. Mr Samosir and Mr Rinaldi have offered themselves for re-election while Mr Mahadi will not be seeking re-election at the forthcoming AGM. In this regard, the NC, having considered the Mr Samosir and Mr Rinaldi’s overall contributions and performance as well as the attendance and participation of these Directors at the Board and Board Committee Meetings, has recommended their re-election and the Board has concurred with the NC’s recommendation. Details of the Directors seeking re-election pursuant to Rule 720(5) of the Catalist Rules are found in Table A set out on pages 42-43 of this Report.

(3) Provision 4.4 (Independence review of Directors)

The independence of each Director is reviewed annually by the NC and, as and when circumstances require, whether there is a change to the independent status previously accorded to the relevant Directors. For the NC’s review on the independence of Directors in FY2019, please refer to the section dealing with Principle 2 in this Report.

(4) Provision 4.5 (Duties and obligations of Directors)

The NC is also responsible for ascertaining if a Director, holding multiple directorships, is able and has been adequately carrying out his duties as a Director. A review is conducted annually by the NC and takes into consideration results of the assessment of the effectiveness of the individual Director, actual conduct on the Board, and the Director’s portfolio of directorships and principal commitments. Each of the Directors updates the Company of any changes in his external appointments and these changes are noted at the Board meetings for review.

The NC has not set a limit to the number of directorships that a Director may hold. The NC is of the view that the effectiveness of each of the Directors is best assessed by a qualitative assessment of the Director’s contributions, after taking into account his other listed company board directorships and other principal commitments. The NC and the Board believes that each individual director is best placed to determine and ensure that he is able to devote sufficient time and attention to discharge his duties and responsibilities as a Director of the Company, bearing in mind his other commitments. The NC does not wish to omit from consideration outstanding individuals who, despite the demands on their time, have the capacity to participate and contribute as members as the Board.

The considerations in assessing the capacity of the Directors include expected and/or competing time commitments of the Directors, competencies of Directors, size and composition of the Board, capacity, complexity and expectations of the other listed directorships and principal commitments held and nature and scope of the Group’s operations and size.

The NC has reviewed and is satisfied that in FY2019, where Directors had other listed company board representations, the Directors have been able to devote sufficient time, resources and attention to the affairs of the Company to adequately carry out their duties as Directors of the Company. Currently, the Company does not have alternate directors, and no alternate Director had been appointed to the Board for the financial year under review.

Key information such as academic and professional qualifications of the Directors, including his current directorship in other listed companies are set out in the “Board of Directors” section of this Annual Report.



BOARD PERFORMANCE

Principle 5: The Board undertakes a formal annual assessment of its effectiveness as a whole, and that of each of its board committees and individual directors.

(1) Provisions 5.1 and 5.2 (Board Evaluation Process)

The Board, through the NC, conducts a formal assessment annually on the effectiveness of the Board, the Board Committees and on each Director through annual assessment of Board’s effectiveness. The NC recommends to the Board the objective performance criteria and process for the evaluation of the effectiveness of the Board as a whole as well as each individual Director. Where appropriate, the Board will review and make changes to the performance criteria to align with prevailing regulations and requirements. The performance criteria shall not be changed from year to year without justification. Recommendations based on these assessments would be tabled to the Board for discussion and/or adoption. The Board will act on the results of the performance evaluation and the recommendation of the NC, and where appropriate, in consultation with the NC, new members may be appointed or resignation of Directors may be sought.

The Board has not engaged any external facilitator for this annual assessment of Board’s effectiveness. The Board Evaluation Form aims to assess effectiveness of the Board based on board size and composition, Board’s processes and participation in meetings, Board’s accountability, discharge of Board’s functions as well as Board’s access to information. The performance criteria for evaluation of the individual Directors focuses on whether the Directors, both individually and collectively, bring to the Board independent and objective perspectives to enable sound, balanced and well-considered decisions to be made.

For FY2019, the assessment is conducted through the completion of a Board Evaluation Form by each Director, which were collated and submitted to the NC for review to assess the overall effectiveness of the Board and the Board Committees.

The results of the evaluation and the NC’s recommendations were presented to the Board, along with areas identified for improvement in relation to the effectiveness of the Board and the Board Committees. Subsequent to the review, the Board is of the view that the Board and its Board Committees operate effectively and each Director is contributing to the overall effectiveness of the Board. Each member of the NC shall abstain from deliberating and voting on any resolutions in respect of the assessment of his performance or re-nomination as Director.

REMUNERATION MATTERS

Procedures for Developing Remuneration Policies/Level and Mix of Remuneration/Disclosure on Remuneration

Principle 6: The Board has a formal and transparent procedure for developing policies on director and executive remuneration, and for fixing the remuneration packages of individual directors and key management personnel. No director is involved in deciding his or her own remuneration.

Principle 7: The level and structure of remuneration of the Board and key management personnel are appropriate and proportionate to the sustained performance and value creation of the company, taking into account the strategic objectives of the company.



Principle 8: The company is transparent on its remuneration policies, level and mix of remuneration, the procedure for setting remuneration, and the relationships between remuneration, performance and value creation.

(1) Provisions 6.1 and 6.2 (Composition of the RC)Provision 6.3 (Remuneration framework)Provision 6.4 (Remuneration consultant)

The RC consist of three Directors, all of whom are Independent Non-Executive Directors, and are responsible for reviewing the remuneration policy and framework of the Directors and Management. The Chairman of the RC is Mr Chng. The RC will meet at least once a year or when necessary.

Under its written terms of reference, the responsibility of the RC amongst others: –

– Reviewing and recommending a framework of remuneration policies to determine specific remuneration packages and terms of employment for the Directors and key executives;

– Functioning as the committee to administer the BlackGold Employee Share Option Scheme; and

– Functioning as the committee to administer and implement the BlackGold Employee Share Award Scheme.

No individual Director shall be directly involved in recommending and deciding their own remuneration.

The RC has access to the appropriate expert advice in the field of executive compensation and remuneration matters, if required, whereby the cost of such independent professional advice will be borne by the Company. During the financial year, the RC did not require the services of an external remuneration consultant.

(2) Provisions 7.1, 7.2 and 7.3 (Remuneration of executive and non-executive Directors and KMPs)

Annual reviews of the compensation and remuneration packages are conducted by the RC to ensure that the remuneration of the Executive Directors and key Management are commensurate with their performance, giving due regard to the size, complexity, financial health and current stage of production of the Group, and are competitive to recruit, retain and motivate the personnel. The remuneration packages are also designed to support the implementation of the Group’s Strategy and to enhance shareholders value. The guiding principles for remuneration framework are (i) alignment with shareholders’ interest; (ii) fair and appropriate; and (iii) pay for performance.

The Independent Directors receive Directors’ fees in accordance with a remuneration framework where each Director is paid a basic fee based on their level of responsibilities. The Chairman and, where relevant, the Lead Independent Director are paid additional fees for their appointments commensurate with additional responsibilities associated with their appointments. The Independent Directors shall not be over-compensated to the extent that their independence may be compromised, and the RC’s recommendation for the Directors’ fees had been endorsed by the Board, following which the recommendation is presented for shareholders’ approval at the AGM.

Executive Directors are remunerated as members of Management, and do not receive Directors’ fees. The Company has entered into a Service Agreement with Mr Andreas Rinaldi for an initial term of three years from 29 November 2019. Upon expiry of the initial term of three years, the employment of Mr Rinaldi shall be automatically renewed on a year-to-year basis on such terms and conditions as the parties may agree. Pursuant to the Service Agreement, the remuneration packages of the Executive Director consist of



(i) a basic salary component; (ii) a fixed bonus in the amount equivalent to the basic monthly salary of the executive; and (iii) a variable component, where applicable, based on the performance of the Group as a whole. The variable bonus is calculated based on the Group’s audited consolidated profit before income tax, excluding exceptional items, for the financial year. The Executive Director and/or his associates will abstain from voting in respect of any resolution or decision to be made by the Board in relation to their terms and renewal of his respective Service Agreement. Each member of the RC shall abstain from voting on any resolutions, making recommendations and/or participating in any deliberations of the RC in respect of his remuneration package or that of employees related to him (if any).

The Board has reviewed the terms of their Service Agreements and is of the opinion that the remuneration of the Executive Director and Management is competitive compared to the market rate for companies in a similar stage of production.

No termination or retirement benefits are granted to the Directors, CEO and key Management. The RC is of the view that there is no requirement to institute contractual provisions to allow the Company to reclaim incentive components of their remuneration in exceptional circumstances of misstatement of financial results, or of misconduct resulting in financial loss. The Executive Directors owe a fiduciary duty to the Company and the Company should be able to avail itself to remedies against the Executive Directors in the event of such breach of fiduciary duties.

(3) Provisions 8.1 and 8.3 (Disclosure of remuneration and details of employee share schemes)

The Code recommends that companies fully disclose the remuneration of each individual director and the CEO on a named basis. The Board is of the opinion that it is not in the best interest of the Company to disclose the exact details of the Directors’ remuneration due to competitiveness in the industry for talent. As such, the Board has deviated from complying with the relevant guideline of the Code and has provided a breakdown, showing the level and mix of each Director and the CEO in bands of S$250,000.

A breakdown showing the level and mix of remuneration paid/payable to each individual Director and the top 5 management personnel for the financial year ended 31 December 2019 is as follows:

Name of Director Base SalaryDirectors’

FeeBonus

Provident Fund

ContributionTotal

Between S$250,001 to S$500,000

(%) (%) (%) (%) (%)

Philip Cecil Rickard2 92 – 8 – 100

Below S$250,000

James Rijanto1 95 – 5 – 100

Andreas Rinaldi6 100 – – – 100

Bala Chandran3 – 100 – – 100

Gerald Lim Thien Su4 – 100 – – 100

Nandakumar Ponniya Servai5 – 100 – – 100


– 100 – – 100

Lim Chee San7 – 100 – – 100

Wahyu Mahadi8 – 100 – – 100

Chng Hee Kok9 – 100 – – 100

Soh Sai Kiang10 – 100 – – 100



Name of Top 5 Management Personnel (who are not

Directors or CEO)

Base Salary

Directors’ Fee

BonusProvident

Fund Contribution

Total

Below S$250,000 (%) (%) (%) (%) (%)

Jeremy Ng11 85 – 7 8 100

Rudy Herlambang 93 – 7 – 100

Suherman Budiono 91 – 9 – 100

Risa Herisana 92 – 8 – 100

Ira Julianti 92 – 8 – 100

Notes:–

1. Mr James Rijanto has resigned from his position as Executive Director and CIO on 31 July 2019

2. Mr Philip Cecil Rickard has resigned from his position as Executive Chairman and CEO on 29 November 2019

3. Mr Bala Chandran has resigned from his position as Independent Director, member of AC, NC and RC on 31 July 2019

4. Mr Gerald Lim Thien Su has resigned from his position as Independent Director, Chairman of AC and member of RC on 31 July 2019

5. Mr Nandakumar Ponniya Servai has resigned from his position as Lead Independent Director, Chairman of NC and RC, and member of AC on 31 July 2019

6. Mr Andreas Rinaldi was appointed as Executive Director and CEO on 29 November 2019

7. Mr Lim Chee San was appointed as Lead Independent Director on 31 July 2019 and was re-designated to Independent Director on 29 November 2019

8. Mr Wahyu Mahadi was appointed as Independent Director as of 31 July 2019

9. Mr Chng Hee Kok was appointed as Independent Director as of 17 September 2019

10. Mr Soh Sai Kiang was appointed as Independent Director as of 17 September 2019 and was re-designated to Independent Non-Executive Chairman on 29 November 2019

11. Mr Jeremy Ng has resigned from his position as Chief Financial Officer as of 31 July 2019

For FY2019, the aggregate total remuneration paid to the top five management personnel (who are not Directors or CEO) was approximately S$359,764.

The Group has in place an Employee Share Option Scheme (“ESOS”) which had been approved by shareholders at an extraordinary general meeting of the Company in 2015. No share options have been issued since the commencement of the ESOS up to the date of this Report.

The BlackGold Share Award Scheme (“ESAS”) was approved by shareholders at an extraordinary general meeting held in 2017 by the Group. Under the ESAS, participants are granted fully-paid shares, free of charge, provided that certain conditions are met. The ESAS seeks to motivate employees and non-executive Directors of the Group to optimise and recognise key contributions made to the Group, instil loyalty to, and retain key employees whose work are essential to the long-term prosperity of the Group. Since the commencement of the ESAS, 9,950,000 share awards have been granted by the Company of which 9,550,000 have vested while 400,000 have lapsed following the resignation of certain employee. More details can be found on the Company’s announcement dated 21 June 2018 and 21 June 2019.

Further information on the ESOS and the ESAS are set out in the Company’s Circular dated 30 December 2014 and 15 August 2017 respectively. The RC and the Board will constantly evaluate and assess the implementation of long-term incentive schemes, or any other appropriate incentive plans, with the aim of enhancing the link between rewards and corporate and individual performance.



(4) Provision 8.2 (Remuneration of related employees)

There are no employees who are substantial shareholders of the Company, or are immediate family members of a Director, CEO or substantial shareholder of the Company, or CEO of the Company, and whose remuneration exceeded S$100,000 during FY2019.

ACCOUNTABILITY AND AUDIT

Risk management and Internal Controls

Principle 9: The Board is responsible for the governance of risk and ensures that Management maintains a sound system of risk management and internal controls, to safeguard the interests of the company and its shareholders.

(1) Provision 9.1 (Nature and extent of risks)Provision 9.2 (Assurance from the CEO, Group CFO and KMPs)

The Board recognizes the importance of having an effective system of internal controls and risk management in place to safeguard shareholders’ interests and the Group’s assets, compliance with the appropriate legislation, maintenance of proper accounting records and mitigate any business risks.

Currently, the Group does not have a risk management committee. The responsibility of the risk management function is assumed by the Board and Management.

The Board, with assistance from the internal auditors, is responsible for the governance of risk by ensuring Management maintains a sound system of risk management and internal controls to safeguard shareholders’ interest and the Group’s assets and determines the nature and extent of the significant risks which the Board is willing to take in achieving strategic objectives.

The external auditors, during the conduct of their annual audit procedures on the statutory financial statements, may also report on matters relating to internal controls relevant to the Group’s preparation of financial statements as specified by their scope of work as stated in their audit plan. Any material non-compliance and internal control weaknesses noted by the external auditors and recommendation for improvement will be reported to the AC. Management will then take corrective measures to strengthen the internal controls.

The system of internal controls in place is reviewed by the AC annually to ensure its adequacy, effectiveness and integrity in addressing financial, operational, compliance and information technology controls, and risk management systems. The Board acknowledges that no cost-effective internal control system will preclude all errors and irregularities. The system is designed to manage rather to eliminate the risk of failure to achieve business objectives and can provide only reasonable and not absolute assurance against material misstatement or loss. The CEO and the CFO have also provided assurance to the Board a) that the financial records have been properly maintained and the financial statements give a true and fair view of the Group’s operations and finances; and b) regarding the effectiveness of the Group’s risk management and internal controls.

Based on the internal controls established and maintained by the Group, work performed by the internal and external auditors, reviews performed by Management, the Board, with the concurrence of the AC, is of the opinion that the internal controls of the Group are adequate and effective in addressing the financial, operational, information technology controls, compliance risks and risk management systems as at 31 December 2019.



The Board notes that no system of internal controls can provide absolute assurance against the occurrence of material errors, poor judgement in decision-making, human error, fraud or other irregularities.

The Group’s financial performance and operations are influenced by a wide range of risk factors and some of these risks are beyond the Group’s control. There may also be risks that are either presently unknown or not currently assessed as significant, which may later prove to be material. The Group aims to mitigate these risks through appropriate risk management strategies and internal controls.

AUDIT COMMITEE

Principle 10: The Board has an Audit Committee which discharges its duties objectively.

(1) Provisions 10.1, 10.2, and 10.3 (Composition of the AC)

As at the date of this report, the AC consists Mr Lim, as the Chairman, as well as Mr Soh, and Mr Chng as members. All three are Independent Non-Executive Directors. No former partner or Director of the Company’s existing audit firm or auditing corporation is a member of the AC.

All members of the AC have the requisite skills and qualifications to effectively carry out their duties.

Under its written terms of reference, the AC duties and functions include:

• Reviewing with the internal and external auditors the audit plan, scope of work, their evaluation of the system of internal accounting controls, their management letter and Management’s response and results of the audits conducted by the internal and external auditors;

• Reviewing the internal control and procedures and ensure coordination between the external auditors and Management;

• Monitoring the integrity of the financial information provided by the Company, assessing, and challenging, where necessary, the correctness, completeness, and consistency of financial information before submission to the Board for approval;

• Assessing the adequacy and effectiveness of the internal control systems established by Management to identify, assess, manage, and disclose financial, operational, compliance and information technology controls (including those relating to compliances with existing legislation and regulation);

• Monitoring and assessing the role and effectiveness of the internal audit function in the overall context of the Company’s risk management system, including review of the internal auditors’ reports on the effectiveness of the systems for internal control, financial reporting and risk management;

• In connection with the terms of engagement to the external auditors, making recommendations to the Board on the selection, appointment, re-appointment, and resignation of the external auditors based on a thorough assessment of the external auditors’ functioning, and approve the remuneration and terms of engagement of the external audit;

• Reviewing the significant financial reporting issues and judgements so as to ensure the integrity of the financial statements of the Company and any announcements relating to the Company’s financial performances.

• Reviewing the assurance from the CEO and the CFO on the financial records and financial statements.



• Monitoring and assessing the external auditors’ independence annually and keep the nature and extent of non-audit services provided by the external auditors under review to ensure the external auditors’ independence or objectivity is not impaired, and to nominate them for re-appointment;

• Reviewing the interested person transactions on a quarterly basis;

• Reviewing the adequacy, effectiveness, independence, scope and results of the external audit and the Company’s internal audit function; and

• Reviewing the policy and arrangements for concerns about possible improprieties in financial reporting or other matters to be safely raised, independently investigated and appropriately followed up on. The Company publicly discloses, and clearly communicates to employees, the existence of whistle-blowing policy and procedures for raising such concerns.

The AC has full authority to investigate any matter within its term of reference, full access to and cooperation from Management and full discretion to invite any Director, key management personnel or other employee of the Group to attend its meetings and is given reasonable resources to enable it to discharge its functions properly and effectively.

During the year, the AC reviewed the quarterly and full year results of FY2019, including the adequacy of disclosures as well as the key changes in accounting policies applied. Management is kept abreast of changes in the accounting standards by both internal and external auditors; the information is then relayed to the AC. Each year, Management would review the changes or updates in accounting standards or any other issues that are applicable to the Group’s financial statements, if any and brief the AC and Board on such changes.

(2) Provision 10.4 (Internal audit function)

The Board recognizes that it is responsible for maintaining a system of internal controls to safeguard shareholders’ investments and the Company’s businesses and assets while Management is responsible for establishing and implementing the internal control procedures in a timely and appropriate manner. For the financial year under review, as the size of the Group does not warrant an in-house internal audit function, the Company has outsourced its internal audit function to Nexia TS Risk Advisory Pte Ltd (“Nexia TS”). Audit work performed by the internal auditors is guided by International Standards for the Professional Practice of Internal Auditing issued by the Institute of Internal Auditors. The internal auditors’ primary line of reporting would be to the chairman of the AC, although the internal auditors would also report administratively to the CEO. Nexia TS is an international well-established firm with vast experience in areas, including internal audit. The engagement team assigned comprises 3 members and the partner-in-charge has more than 14 years of experience performing internal audits for listed companies in Singapore. The AC is satisfied that the internal audit function is independent, effective and adequately resourced. Accordingly, the Company is in compliance with Rule 1204(10C) of the Catalist Rules.



The relevant experience and qualifications of Nexia TS and the engagement team are set out below:

Name and background of Firm Nexia TS Risk Advisory Pte Ltd

Nexia TS was founded in 1993 by two experienced chartered accountants. To date, Nexia TS is recognised as an established accounting firm. Being an independent member firm of Nexia International, Nexia TS is affiliated to accounting firms in many parts of the world. Nexia TS among the first local accounting firms to be accredited by the Institute of Chartered Accountants in Australia, Institute of Chartered Accountants in England & Wales and Singapore Accountancy Commission – Singapore Qualification Programmes (Singapore QP) to provide the supervision of professionals undergoing traineeship to qualify as Chartered Accountants.

The Nexia TS group of companies comprises mainly Nexia TS Pte Ltd, Nexia TS Public Accounting Corporation, Nexia TS Tax Services Pte Ltd, Nexia TS Risk Advisory Pte Ltd, Nexia TS Advisory Pte Ltd, Nexia TS Technology Pte Ltd, Nexia TS (Shanghai) Co. Ltd., NTS Asia Advisory Sdn Bhd (“NTS Malaysia”) and NTS Myanmar Co. Ltd (“NTS Myanmar”).

Risk Advisory Director particulars The Risk Advisory Director holds qualification of Bachelor of Accountancy from Singapore Management University, Chartered Accountant, Certified Internal Auditor, Certified Anti-Money Laundering Specialist, and Professional Singapore Certified Management Consultant. Prior to her tenure at Nexia TS, she worked for audit & assurance at a big 4 accounting firm. She has more than 14 years of experience in internal controls advisory, compliance, external audit and sustainability reporting.

She has served clients in diverse industries including property development and hotel management, manufacturing, interior design & exhibition, oil & gas, food & beverage, architectural services, education, trading and retail as well as government bodies with exposure in countries such as China, Hong Kong, Indonesia, Malaysia, Philippines, Taiwan, Vietnam, Australia, United States of America, Korea and Dubai

Engagement team particulars The Risk Advisory Director is assisted by Risk Advisory Manager and Risk Advisory Associate.

The Risk Advisory Manager holds qualification of Bachelor of Commerce (Accounting and Finance) He possesses 6 years of experience of internal auditing, pre-IPO internal control review, Sarbanes-Oxley reviews, compliance and enterprise risk management. He has served clients in diverse industries including manufacturing, interior design & exhibition, mining, food & beverage, property development & construction, entertainment production, hotel, architectural services, trading and retail.

Before the commencement of the annual internal audit, the internal auditors will propose an internal audit plan to the AC and obtain the approval from the AC before proceeding. The findings of such review are submitted to the AC for their review. Subsequent to the internal audit conducted, the findings and corresponding responses from Management to address these findings were reported at the meeting of the AC.



For FY2019, the internal audit review focused on cash and bank management. Management is responsible for the implementation of the various recommendations and will report the progress of implementation to the AC. Management has rectified all major points, including one high risk item noted by Nexia TS as instructed by the AC. The AC has reviewed the independence, adequacy, and effectiveness of the internal audit function of the Company, and is satisfied that the internal audit function is independent and staffed by suitably qualified and experienced professionals with the relevant experience. The AC also reviews the internal audit reports as well as the remedial measures recommended by the internal auditors and adopted by Management to address any issues or inadequacies identified.

Messrs PricewaterhouseCoopers LLP is the appointed external auditors of the Company. The fees paid to the external auditors in 2019 for audit services amounted to S$220,000. The AC noted that there was no non-audit related work carried out by the external auditors for FY2019. The AC was satisfied that the external auditors had been objective and independent in the audit of the Group. Accordingly, the AC has recommended to the Board that, Messrs PricewaterhouseCoopers LLP be nominated for re-appointment as external auditors at the forthcoming AGM.

The Group has established a whistleblowing policy since 2015 to provide a defined and accessible channel for employees and any persons outside of the employment of the Group to report any actual or suspected wrongdoings in matters of business activities, financial reporting or other matters. During FY2019, no whistleblowing reports were received.

(3) Provisions 10.5 (AC activities during the year)

Annually, the AC will meet with the internal and external auditors without the presence of Management as and when necessary to review the adequacy of audit arrangement with emphasis on the scope and quality of their audit, the independence, objectivity and observations of the external auditors. The Group has complied with Rules 712 and 715 of the Catalist Rules in relation to its external auditors.

SHAREHOLDER RIGHTS AND ENGAGEMENT

Shareholder Rights and Conduct of General Meetings

Principle 11: The company treats all shareholders fairly and equitably in order to enable them to exercise shareholders’ rights and have the opportunity to communicate their views on matters affecting the company. The company gives shareholders a balanced and understandable assessment of its performance, position and prospects.

(1) Provisions 11.1 and 11.2 (Conduct of general meetings)

The Board strongly encourages shareholders to communicate their views and direct questions to Directors or Management regarding the Company and the Group as well as to participate and vote at general meetings. Shareholders of the Company will receive the annual report for the financial reporting year as well as the notices for general meetings will be accompanied with a report/circular, disseminated as an announcement via SGXNET and advertised in the local newspapers.

The Company tables separate resolutions at general meetings on each distinct issue unless the issues are interdependent and linked so as to form one significant proposal. Where the resolutions are “bundled”, the company explains the reasons and material implications in the notice of meeting. Each item of special business included in the notice of the meeting is accompanied, where appropriate, by an explanation or circular in respect of the proposed resolution. A proxy form is sent with the notice of general meeting to the shareholders. The resolutions will be put to vote by poll and an announcement of the results showing the number of votes cast for and against each resolution and the respective percentages for general meetings will be made subsequent to the meeting.



(2) Provision 11.3 (Director and External Auditors’ attendance in AGMs)

At the Company’s general meetings, all Directors are usually present and shareholders are given the opportunity to voice their views and ask Directors, in particular the Chairman of the Board or Management questions regarding the Company’s business activities or financial performance. The external auditors are also invited to attend the AGMs to assist the Directors in addressing shareholders’ queries about the conduct of audit and the preparation and contents of the auditors’ report. For FY2019, the Company held one annual general meeting where all members of the Board were present

(3) Provision 11.4 (Absentia voting)

The Company’s Constitution allows all shareholders to appoint proxies to attend and vote on their behalf at the general meetings. Shareholders can appoint up to two proxies to attend, vote and voice any questions relating to the resolutions tabled in a general meeting and/or company affair, for and on behalf of those shareholders, in the event that such shareholders are not able to attend the said general meeting personally. Shareholders who are relevant intermediaries (as defined under Section 181(6) of the Companies Act) are allowed to appoint more than two proxies to attend, speak and vote at general meetings. As the authentication of shareholder’s identity information and other related security issues still remain a concern, the Company has decided, for the time being not to implement voting in absentia by mail, email or fax. Voting in absentia may only be possible following careful study to ensure the integrity of the information and authentication of shareholders’ identities through the web or other means are not compromised.

(4) Provision 11.5 (Minutes of general meetings)

At general meetings, the Company welcomes shareholders’ participation and to raise any concerns regarding the Group which they may have to the Directors, chairpersons of the AC, NC and RC as well as the Company’s external auditors, whom will be present and available to the shareholders at these meetings. The proceedings of the AGM will be properly recorded by the Company Secretary, including all comments or queries from shareholders relating to the agenda of the meeting, and responses from the Board and Management, and these minutes will be available to shareholders upon their request. Detailed results of the general meetings, which include the number of votes cast for and against each resolution were disclosed via SGXNET.

The Company does not publish minutes of general meetings of shareholders on its corporate website as anticipated by Provision 11.5 as there are potential adverse implications for the Company if the minutes of general meetings are published to the public at large, including the risk of disclosure of sensitive information to the Group’s competitors. The Company is of the view that its position is consistent with intent of Principle 11 as shareholders have a right to attend general meetings either in person or by proxy, including those who did not attend the relevant general meeting, have a statutory right to be furnished copies of minutes of general meetings in accordance with the Companies Act. The Company is therefore of the view that, consistent with the intent of Principle 11, as between themselves, shareholders are treated fairly and equitably by the Company.

(5) Provision 11.6 (Dividend Policy)

The Company does not have a fixed dividend policy. The Board has reviewed and has not declared any dividend for FY2019 as the Company requires the existing cash to fund its operating activities.



SHAREHOLDER RIGHTS AND ENGAGEMENT

Principle 12: The company communicates regularly with its shareholders and facilitates the participation of shareholders during general meetings and other dialogues to allow shareholders to communicate their views on various matters affecting the company.

(1) Provision 12.1 (Shareholder engagement)

The Company recognizes the importance of effective communication through accurate and timely information in accordance with best practices and rules to ensure shareholders make well-informed investment decisions. The Company ensures timely public disclosure of material information, financial results, annual reports and any other Company developments is made via SGXNET announcements and the Group’s corporate website within the mandatory period prescribed.

Management participates actively in investor seminars or conferences organized by various external organisations that encourage investor engagement. Connecting with investors through such events allow Management to receive direct feedback from the investment community as well as allow potential or existing shareholders a better understanding of the Group and its business.

Communication between the Company and its shareholders is made principally through:

– annual reports to shareholders issued before the Annual General Meeting. The annual report, which contains the notice of annual general meeting, includes key relevant information about the Company and the Group including a review of the Group’s major operations and their general outlook, disclosures required by the Companies Act, Listing Manual and the Accounting Standards;

– quarterly financial announcements on the financial performance of the Group for the period in question;

– circulars for extraordinary general meetings where applicable (“EGM”);

– announcements and disclosures to the SGX-ST via SGXNET; and

– the Company’s website at www.blackgold-group.com at which our shareholders can access information on the Group.

(2) Provisions 12.2 and 12.3 (Investor relation policy and shareholder queries)

The Company has an investor policy which encourages shareholders to regularly communicate with it including through the Company’s designated email address, [email protected], provided in the Company’s corporate website. The Company’s objective is to encourage constructive comments and exchange of views so that it may take into account or address such comments and concerns when preparing its quarterly results announcements and annual report. In addition, where necessary, the Company may issue announcement(s) in response to comments and concerns raised, so that the information is available to all shareholders.



MANAGING STAKEHOLDERS RELATIONSHIPS

Engagement with Stakeholders

Principle 13: The Board adopts an inclusive approach by considering and balancing the needs and interests of material stakeholders, as part of its overall responsibility to ensure that the best interests of the company are served.

(1) Provision 13.1 (Stakeholder engagement)

The Company has arrangements in place to identify and engage with its material stakeholder groups and to manage its relationships with such groups. This is done by the different business units on an on-going basis (for example, with their suppliers, customers and the local community in which they operate) as such matters have to be tailored to their differing needs, and on an annual basis in conjunction with the Company’s preparation for its sustainability reporting. For more information on the Company’s stakeholder engagement, please refer to the Company’s Sustainability Report which was released on the Company’s website and SGXNET on 29 May 2020.

(2) Provision 13.2 (Strategy and key areas of focus in managing stakeholders)

The Group’s strategy and key area focus in relation to Management of stakeholder relationships during FY2019 are disclosed in the Company’s Sustainability Report which was released on the Company’s website and SGXNET on 29 May 2020.

(3) Provision 13.3 (Corporate website)

The Company maintains a current corporate website (www.blackgold-group.com) to fairly communicate and engage with its stakeholders. The website provides all publicly disclosed financial information, corporate announcements, press releases, and the annual report

MATERIAL CONTRACTS

Save as disclosed below, there were no material contracts entered into by the Company or any of its subsidiaries involving the interests of any Director or controlling shareholders, either still subsisting at the end of financial year, or if not then subsisting, entered into since the end of the previous financial year ended 31 December 2018:–

1. Service Agreements entered into between the Executive Directors and the Company.

2. Loan agreement dated 20 December 2012 between Twin Gold Ventures S.A. (“Twin Gold Ventures”) and BlackGold Energy Limited (“BGE”) for a loan facility from Twin Gold Ventures to BGE for up to US$10 million. The loan is interest-free and unsecured.

3. Loan agreement dated 20 December 2012 between Twin Gold Ventures and BlackGold Asia Resources Pte. Ltd. (“BGA”) for a loan facility from Twin Gold Ventures to BGA for up to US$10 million. The loan is interest-free and unsecured.

4. Loan agreement dated 20 December 2012 between Twin Gold Ventures and PT Samantaka Batubara (“PT SB”) for a loan facility from Twin Gold Ventures to PT SB for up to US$10 million. The loan is interest-free and unsecured.

5. Loan agreement dated 26 March 2013 between Novel Creation Holdings Limited (“Novel Creation”) and PT SB for a loan facility from Novel Creation to PT SB for up to US$10 million. The loan is interest-free and unsecured.



6. First Supplemental Deed dated 29 September 2014 between Twin Gold Ventures, Novel Creation (collectively, the “Lenders”) and BGA, BGE and PT SB (collectively, the “Subsidiaries”) to extend the Non-Repayment Period to 9 September 2016.

7. Second Supplemental Deed dated 31 March 2016 between the Lenders and the Subsidiaries to extend the Non-Repayment Period to 9 March 2018.

8. Third Supplemental Deed dated 12 May 2017 between the Lenders and the Subsidiaries to extend the Non-Repayment Period to 31 March 2019.

9. Fourth Supplemental Deed dated 29 March 2018 between the Lenders and the Subsidiaries to extend the Non-Repayment Period to 31 March 2020.

10. Fifth Supplemental Deed dated 20 March 2019 between the Lenders and the Subsidiaries to extend the Non-Repayment Period to 31 March 2021.

11. Sixth Supplemental Deed dated 20 March 2020 between the Lenders and the Subsidiaries to extend the Non-Repayment Period to 31 March 2022.

Material contracts (2) to (6) set out above were entered into prior to the completion of the reverse takeover on 10 March 2015, and details have been set out in the circular dated 30 December 2014 issued in connection with the reverse takeover of NH Ceramics Ltd.

INTERESTED PERSON TRANSACTIONS

The Company has established procedures to ensure all transactions with interested persons are properly reviewed and/or approved by the AC quarterly, and that such transactions are conducted at arm’s length basis and will not be prejudicial to the interest of the Company and its minority shareholders. The Company does not have any general mandate from shareholders for interested person transactions pursuant to Rule 920 of the Catalist Rules for FY2019.

Save for interested person transactions with a value of less than S$100,000 each, there were no interested persons transactions entered into by the Group in FY2019. As at 31 December 2019, the total outstanding amount of the Shareholders’ Loans is US$3,900,221. The Shareholders’ Loans are non-interest bearing, unsecured, have no fixed terms of repayment but shall be repayable upon demand from the Lenders. On 20 March 2020, the Lenders signed a sixth supplemental deed to the Shareholder’s Loan to extend the Non-Repayment period to 31 March 2022.

UTILISATION OF PROCEEDS

As at the date of this Annual Report, the net proceeds of approximately S$950K from issuance of placement shares have been utilised as follows:

Intended use of Net Proceeds

Allocation of Net Proceeds as disclosed in the announcements

dated 27 June 2019(S$)

After re-allocation of Net Proceeds as announced in

the 3Q2019 results announcement

(S$)

Net Proceeds utilised as at date

of this Annual Report

(S$)

Balance of the Net Proceeds as

at the date of this Annual

Report(S$)

Repayment of borrowings 260,000 207,624 207,624 –

General working capital 690,000 742,376 742,376 –

Total 950,000 950,000 950,000 –



After a review of the Group’s cash flow and expansion plans, it was decided that S$52,376 of the net proceeds originally intended to be used for the repayment of borrowings to be used for working capital requirements of the Group instead.

The breakdown of the utilized net proceeds for working capital are as follows:

Staff expenses S$315,300

Professional fees S$199,565

Rental expenses S$46,984

Travelling and corporate social responsibility expenses S$18,421

Other operational expenses S$162,106

As at the date of this Annual Report, the net proceeds of approximately S$2,000,000 arising from the issuance of Series A Bonds have been utilised as follows:

Intended use of Series A Net Proceeds

Allocation of Net Proceeds as disclosed in the announcement

dated 5 February 2020

Net Proceeds utilised as at date of this

Annual Report

Balance of the Net Proceeds as

at the date of this Annual Report

(S$) (S$) (S$)

Payment of outstanding professional fees due to the Group’s auditors, legal counsel and Sponsor 795,000 495,000 300,000

Payment of outstanding director’s fees 167,000 167,000 –

Working capital 3,958,000 500,000(2) 3,458,000

Total 4,920,000(1) 1,162,000 3,758,000

Note:

(1) As at the date of this Annual Report, out of the total quantum of S$5,000,000 to be issued under the Series A Bonds, an aggregate of S$2,000,000 was received from the completion of the Series A Bonds issuance with Kingpin and Atrium Asia.

(2) Working Capital comprises (a) staff costs and administrative expenses of S$177,000; (b) other professional fees of S$288,000 and (c) other operating expenses of S$35,000.

DEALINGS IN SECURITIES

In compliance with Catalist Rule 1204(19) of the Catalist Rules, the Company has issued an internal securities code of compliance to provide guidance to the Directors and all employees with regard to dealings in securities. All Directors and employees of the Company are advised by way of quarterly circulars to (i) not deal in the Company’s shares on short-term considerations or when they are in possession of unpublished price-sensitive information and (ii) that they are required to report on their dealings in shares of the Company. The Company prohibits dealings in its shares by its Directors and employees during the period commencing two weeks before the announcement of the Company’s quarterly financial statements and one month before the announcement of the Company’s full-year financial statements, and ending on the date of the announcement of the results. Directors and employees are also expected to observe insider-trading laws at all times even when dealing with securities within the permitted trading period or when they are in possession of unpublished price-sensitive information and they are not to deal in the Company’s securities on short-term considerations.

The Group confirms that it has adhered to its internal securities code of compliance for FY2019.



SUSTAINABILITY REPORT

The Group views sustainability as an integral parts of its business. At BlackGold, we believe in building sustainable businesses that deliver long-term shareholders’ value and growth. The Group believes that a truly sustainable business not only creates economic value, but performs so in a way that benefits its stakeholders.

In line with the concerns of global warming, the Group has undertaken environmentally-friendly measures to reduce energy usage and office consumables. We endeavor to reduce paper usage by encouraging employees to print on both sides of the paper. We also encourage employees to recycle all used paper and use recycled materials where possible. Employees are also encouraged to reduce power consumption. Electrical devices are required to be turned off when not in use and lights in the premises switched off after office hours. We are working to increase the level of awareness of good environmental practices amongst employees and will continue to step up energy conservation and recycling efforts within our operations and business.

In line with the Group’s commitment to keep our shareholders and the market abreast of the Group’s progress on the sustainability front and in accordance with the Catalist Rules, the Group has issued its Sustainability Report on 29 May 2020 on SGXNET and the Company’s website.

NON-SPONSOR FEE

With reference to Rule 1204(21) of the Catalist Rules, there were no non-sponsorship fee paid to the SAC Capital Private Limited in FY2019.

TABLE A

Mr Bangun Madong Parulian Samosir and Mr Andreas Rinaldi are the Directors seeking re-election at the forthcoming AGM (collectively the “Retiring Directors” and each a “Retiring Director”). The key information relating to the Retiring Directors are as follows:

Mr Andreas RinaldiMr Bangun Madong Parulian

Samosir

Date of appointment 29 November 2019 10 March 2015

Date of last re-appointment Not Applicable 25 April 2018

Age 70 years 67 years

Country of principal residence Indonesia Indonesia

The Board’s comments on the NC’s recommendation for re-election

The Board of Directors of the Company has accepted the NC’s recommendation to re-elect Mr Andreas Rinaldi (“Mr Rinaldi”) as an Independent Director of the Company, after taking into consideration of Mr Rinaldi’s performance since he was appointed as Executive Director and Chief Executive Officer of the Company.

The Board of Directors of the Company has accepted the NC’s recommendation to re-elect Mr Bangun Madong Parulan Samosir (“Mr Samosir”) as an Independent Director of the Company, after taking into consideration of Mr Samosir’s performance since he was appointed as an Independent Director of the Company.

Whether appointment is executive, and if so, the area of responsibility

Executive Non-Executive

Job title Executive Director and Chief Executive Officer

Independent Director



Mr Andreas RinaldiMr Bangun Madong Parulian

Samosir

Professional qualifications Associate Degree in English Education

Mine Engineering Graduate from Bandung Institute of Technology

Working experience, occupation(s) during the past 10 years and Principal Commitments Including Directorships

Working Experience

2005 to present: Executive Director of the Indonesian subsidiaries of the Group, namely PT Samantaka Batubara, PT Ausindo Andalas Mandiri and PT Ausindo Prima Andalas

16 October to 29 November 2019: CEO-designate

Working Experience

September 2007 to present: Advisor at PT Pamapersada Nusantara

Past Directorship (for the last 5 years): None

Present Directorship (for the last 5 years): None

29 November 2019 to present: Executive Director and CEO

Past Directorship (for the last 5 years):

Sarmi Papua Asia Oil Ltd

PT Inti Nickelindo Resources

Present Directorship (for the last 5 years):

PT Samantaka Batubara

PT Ausindo Andalas Mandiri

PT Ausindo Prima Andalas

Other principal commitments:

Nil

Other principal commitments:

Nil

Any relationship (including immediate family relationships) with any existing director, existing executive officer, the issuer and/or substantial shareholder of the listed issue or of any of its principal subsidiaries

None None

Conflict of interest (including any competing business)

None None

The Retiring Directors had no interests in the share capital of the Company and its subsidiaries except for 750,000 shares held by Mr Samosir in the share capital of the Company.

The Group had procured the undertaking of the Retiring Directors in the format set out in Appendix 7H under Rule 720(1) of the Catalist Rules of SGX-ST.

The Retiring Directors had responded negative to items (a) to (k) listed in Appendix 7F of the Catalist Rules of SGX-ST.



The directors present their statement to the members together with the audited financial statements of the Group for the financial year ended 31 December 2019 and the balance sheet of the Company as at 31 December 2019.

In the opinion of the directors,

(a) the balance sheet of the Company and the consolidated financial statements of the Group as set out on pages 48 to 101 are drawn up so as to give a true and fair view of the financial position of the Company and of the Group as at 31 December 2019 and the financial performance, changes in equity and cash flows of the Group for the financial year covered by the consolidated financial statements and

(b) at the date of this statement, based on the factors as described in Note 2.1 to the financial statements, there are reasonable grounds to believe that the Company and the Group will be able to pay its debts as and when they fall due.

Directors

The directors of the Company in office at the date of this statement are as follows:

Bangun Madong Parulian SamosirLim Chee SanWahyu Mahadi Soh Sai KiangChng Hee Kok Andreas Rinaldi (appointed on 29 November 2019)

Arrangements to enable directors to acquire shares and debentures

Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object was to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate, other than as disclosed under “Share options” in this statement.

Directors’ interests in shares or debentures

According to the register of directors’ shareholdings, none of the directors holding office at the end of the financial year had any interest in the shares or debentures of the Company or its related corporations, except as follows:

Holdings registered in name of

director or nominee

Holdings in which director is deemed to have an interest

At 31.12.2019

At 1.1.2019

At 31.12.2019

At 1.1.2019

BlackGold Natural Resources Limited(Ordinary shares)Bangun Madong Parulian Samosir 750,000 750,000 – –

The directors’ interests in the ordinary shares of the Company as at 21 January 2020 were the same as those as at 31 December 2019.

DIRECTORS’ STATEMENTFor the financial year ended 31 December 2019


Share options

There were no options granted during the financial year to subscribe for unissued shares of the Company.

No shares have been issued during the financial year by virtue of the exercise of options to take up unissued shares of the Company.

There were no unissued shares of the Company under option at the end of financial year.

Audit Committee

The members of the Audit Committee at the end of the financial year were as follows:

Lim Chee San (Chairman)Soh Sai KiangChng Hee Kok

All members of the Audit Committee were independent non-executive directors of the Company.

The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act. In performing these functions, the Committee reviewed:

• the scope and the results of internal audit procedures with the internal auditor;

• the audit plan of the Company’s independent auditor and any recommendations on internal accounting controls arising from the statutory audit;

• the assistance given by the Company’s management to the independent auditor; and

• the balance sheet of the Company and the consolidated financial statements of the Group for the financial year ended 31 December 2019 before their submission to the Board of Directors.

The Audit Committee has recommended to the Board that the independent auditor, PricewaterhouseCoopers LLP, be nominated for re-appointment at the forthcoming Annual General Meeting of the Company.

Independent Auditor

The independent auditor, PricewaterhouseCoopers LLP, has expressed its willingness to accept re-appointment.

On behalf of the directors

Andreas RinaldiDirector

Bangun Madong Parulian SamosirDirector

29 June 2020

DIRECTORS’ STATEMENTFor the financial year ended 31 December 2019


REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Disclaimer of Opinion

We do not express an opinion on the consolidated financial statements of Blackgold Natural Resources Limited (the “Company”) and its subsidiaries (the “Group”) and the balance sheet of the Company. Because of the significance of the matters described in the “Basis for Disclaimer of Opinion” section of our report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.

We were engaged to audit the financial statements of the Company and the Group comprising:

• the consolidated statement of comprehensive income of the Group for the financial year ended 31 December 2019;

• the balance sheet of the Group as at 31 December 2019;

• the balance sheet of the Company as at 31 December 2019;

• the consolidated statement of changes in equity of the Group for the financial year then ended;

• the consolidated statement of cash flows of the Group for the financial year then ended; and

• the notes to the financial statements, including a summary of significant accounting policies.

Basis for Disclaimer of Opinion

Going concern

As stated in Note 2.1 to the financial statements, the Group reported a loss after tax of US$1,541,866 for the financial year ended 31 December 2019. In addition, as at 31 December 2019, the Group’s current liabilities exceeded the current assets by US$2,553,899 and the Company’s current liabilities exceeded its current assets by US$1,943,481. These and the other matters described in Note 2.1 to the financial statements indicate the existence of material uncertainties that cast significant doubt about the ability of the Group and of the Company to operate as going concerns.

The directors have prepared the financial statements on a going concern basis based on the assumptions as disclosed in Note 2.1 to the financial statements. The validity of the going concern basis on which the financial statements are prepared is dependent on certain assumptions and the successful outcome of the Group’s various efforts as disclosed in Note 2.1 to the financial statements. The assumptions are premised on future events, the outcome of which are inherently uncertain. Notwithstanding the availability of the shareholders’ loan facility, based on the information available to us, we were unable to obtain sufficient appropriate audit evidence regarding the financial ability of the shareholders in providing the financial support required to ensure that the Group and the Company are able to pay their debts as and when they fall due. We were therefore unable to conclude whether the use of the going concern assumption, which has been adopted for the preparation of the accompanying financial statements, is appropriate.

If the Group and the Company are unable to obtain the necessary funding to continue in operational existence for the foreseeable future, several adjustments would have to be made to the accompanying financial statements to reflect the situation that assets may need to be realised other than in the normal course of business and at amounts which could differ significantly from the amounts at which they are currently recorded. In addition, the Group may have to provide for further liabilities that might arise, and to reclassify non-current assets and liabilities as current assets and liabilities. The accompanying financial statements do not reflect these adjustments.

INDEPENDENT AUDITOR’S REPORTTo the Members of Blackgold Natural Resources Limited For the financial year ended 31 December 2019


REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)

Responsibilities of Management and Directors for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Companies Act (the “Act”), Chapter 50 and Singapore Financial Reporting Standards (International), and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets.

In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The directors’ responsibilities include overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our responsibility is to conduct an audit of the financial statements in accordance with Singapore Standards on Auditing and to issue an auditor’s report. However, because of the matters described in the “Basis for Disclaimer of Opinion” section of our report, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on these financial statements.

We are independent of the Company in accordance with the Accounting and Corporate Regulatory Authority Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (“ACRA Code”) together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

In view of the significance of the matters referred to in the “Basis for Disclaimer of Opinion” section of our report, we do not express an opinion on whether the accounting and other records required by the Act to be kept by the Company and by the subsidiary corporations incorporated in Singapore of which we are the auditors, have been properly kept in accordance with the provisions of the Act.

The engagement partner on the audit resulting in this independent auditor’s report is Mohamad Saiful Saroni.

PricewaterhouseCoopers LLPPublic Accountants and Chartered AccountantsSingapore, 29 June 2020

INDEPENDENT AUDITOR’S REPORTTo the Members of Blackgold Natural Resources Limited For the financial year ended 31 December 2019


The accompanying notes form an integral part of these financial statements.

Note 2019 2018US$ US$

(restated)

Sales 3 11,033,991 5,647,854Cost of sales 6 (8,838,406) (5,307,918)

Gross profit 2,195,585 339,936

Other income – net 4 14,587 10,775

Other gains/(losses)– Impairment loss on trade receivables 10 (3,370) –– Others 4 125,601 (314,589)

Expenses– Administrative 6 (3,008,579) (4,552,305)– Finance 5 (720,552) (370,426)– Others 6 (145,035) (14,037,701)

Loss before income tax (1,541,763) (18,924,310)Income tax expense 7 (103) (1,030)

Loss for the financial year (1,541,866) (18,925,340)

Other comprehensive income:

Items that may be reclassified subsequently to profit or loss:

Currency translation differences arising from consolidation (165,414) (1,061,753)

Items that will not be reclassified subsequently to profit or loss:

Currency translation differences arising from consolidation (4,399) (6,309)

Other comprehensive loss, net of tax (169,813) (1,068,062)

Total comprehensive loss, net of tax (1,711,679) (19,993,402)

Loss attributable to:Equity holders of the Company (1,542,349) (18,756,159)Non-controlling interests 483 (169,181)

(1,541,866) (18,925,340)

Total comprehensive loss attributable to:Equity holders of the Company (1,707,763) (19,817,912)Non-controlling interests (3,916) (175,490)

(1,711,679) (19,993,402)

Losses per share for loss attributable to equity holders of the Company (US cents per share)

Basic losses per share 8(a) (0.16) (2.01)

Diluted losses per share 8(b) (0.16) (2.01)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFor the financial year ended 31 December 2019



Note 2019 2018US$ US$

(restated)

ASSETSCurrent assetsCash and cash equivalents 9 89,132 547,816Restricted cash 13 171 24,497Trade and other receivables 10 4,865,841 1,448,078Inventories 11 405,659 1,882,602Deposits and prepayments 12 469,855 193,771

5,830,658 4,096,764

Non-current assetsProperty, plant and equipment 17 106,716 2,788Mining properties 15 – –Exploration and evaluation expenditure 14 – –Restricted cash 13 185,363 177,781

292,079 180,569

Total assets 6,122,737 4,277,333

LIABILITIESCurrent liabilitiesTrade and other payables 19 1,642,951 2,342,872Accrued operating expenses 20 3,832,025 2,507,976Borrowings 24 2,909,188 1,141,421Current income tax liabilities 393 214

8,384,557 5,992,483

Non-current liabilitiesBorrowings 24 38,592 –Other non-current liabilities 23 153,542 83,279Loans from shareholders 22 3,895,589 3,900,221Provisions 21 221,465 110,972

4,309,188 4,094,472

Total liabilities 12,693,745 10,086,955

NET ASSETS (6,571,008) (5,809,622)

EQUITYCapital and reserves attributable to equity holders of the CompanyShare capital 25 56,312,822 55,619,594Currency translation reserve (2,531,727) (2,366,313)Other reserve 26 1,614,648 1,358,065Accumulated losses (61,718,287) (60,175,938)

(6,322,544) (5,564,592)Non-controlling interests (248,464) (245,030)

Total equity (6,571,008) (5,809,622)

BALANCE SHEET − GROUPAs at 31 December 2019



Note 2019 2018US$ US$

(restated)

ASSETSCurrent assetsCash and cash equivalents 9 1,528 26,649Other receivables 10 31,938 14,866Deposits and prepayments 12 13,231 5,958

46,697 47,473

Non-current assetsProperty, plant and equipment 17 76,852 2,788Investments in subsidiaries 16 707 707

77,559 3,495

Total assets 124,256 50,968

LIABILITIESCurrent liabilitiesOther payables 19 1,465,217 1,065,249Accrued operating expenses 20 487,699 310,325Lease liabilities 24 36,941 –Current income tax liabilities 321 214

1,990,178 1,375,788

Non-current liabilitiesLease liabilities 24 35,936 –

Total liabilities 2,026,114 1,375,788

NET LIABILITIES (1,901,858) (1,324,820)

EQUITYCapital and reserves attributable to equity holders of the CompanyShare capital 25 171,410,017 170,716,789Currency translation reserve 481,364 505,248Other reserve 26 296,169 245,872Accumulated losses 27 (174,089,408) (172,792,729)

Total equity (1,901,858) (1,324,820)

BALANCE SHEET − COMPANYAs at 31 December 2019


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Note 2019 2018US$ US$

(restated)

Cash flows from operating activitiesLoss after tax (1,541,866) (18,925,340)Adjustments for:

– Depreciation 123,095 226,746– Amortisation of mining properties – 48,904– Impairment of exploration and evaluation expenditure – 1,291,261– Impairment of property, plant and equipment 4,865 5,485,705– Impairment of mining properties 139,455 7,143,035– Impairment of prepayments – 117,664– Impairment of accounts receivable 3,370 –– Share-based compensation expense 50,297 245,872– Loss on disposal of property, plant and equipment 885 14,271– Interest income (11,142) (10,754)– Interest expense 720,552 370,426– Income tax expense 103 1,030– Unrealised currency translation (gains)/losses (121,485) 298,363

(631,871) (3,692,817)Changes in working capital:

– Inventories 1,557,225 526,972– Deposits and prepayments (263,833) 233,682– Trade and other receivables (3,709,621) (446,546)– Trade and other payables 461,615 1,636,766– Other non-current liabilities 66,710 6,044– Provisions 105,761 15,932

Cash used in operations (2,414,014) (1,719,967)Tax paid – (1,229)

Net cash used in operating activities (2,414,014) (1,721,196)

Cash flows from investing activitiesAddition of property, plant and equipment (4,932) (26,456)Addition of mining properties (139,455) –Interest received 11,142 10,754

Net cash used in investing activities (133,245) (15,702)

Cash flows from financing activitiesProceeds from issuance of placement shares 693,228 –Proceeds from borrowings 11,548,388 1,599,848Repayment of borrowings (9,889,824) (464,860)Principal repayment of lease liabilities (124,256) –Repayment of finance lease liabilities – (1,861)Interest paid (186,707) –Withdrawal/(placement) of restricted cash 25,371 (24,497)

Net cash provided by financing activities 2,066,200 1,108,630

Net decrease in cash and cash equivalents (481,059) (628,268)Cash and cash equivalentsBeginning of financial year 9 547,816 1,203,825Effects of currency translation on cash and cash equivalents 22,375 (27,741)

End of financial year 9 89,132 547,816

CONSOLIDATED STATEMENT OF CASH FLOWSFor the financial year ended 31 December 2019



Reconciliation of liabilities arising from financing activities

1 January

2019

US$

Proceeds

from

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US$

Principal

and interest

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US$

Non-cash changes

US$

31 December

2019

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Adoption of

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Interest

Expenses

Foreign

exchange

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Fair value

of interest

free loan

(Note 26)

Lease liabilities – – (127,995) 133,519 86,444 3,739 8,391 – 104,098

Borrowings 1,141,421 11,548,388 (9,889,824) – – – 43,697 – 2,843,682

Loans from shareholders 3,900,221 – – – – 206,288 (4,152) (206,768) 3,895,589

1 January

2018

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Proceeds

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Principal

and interest

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Non-cash changes

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31 December

2018

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Adoption of

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Addition

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Interest

Expenses

Foreign

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movement

Fair value

of interest

free loan

(Note 26)

Finance Lease 1,856 – (1,861) – – 41 (36) – –

Borrowings – 1,599,848 (464,860) – – – 6,433 – 1,141,421

Loans from shareholders 3,900,824 – – – – 216,746 – (217,349) 3,900,221

CONSOLIDATED STATEMENT OF CASH FLOWSFor the financial year ended 31 December 2019


These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

1. GENERAL INFORMATION

BlackGold Natural Resources Limited (the “Company”) is listed on the Singapore Exchange and incorporated and domiciled in Singapore. The address of its registered office is 7 Temasek Boulevard, Suntec Tower One, #08-07, Singapore 038987.

The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are disclosed in Note 16 to the financial statements.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

These financial statements have been prepared in accordance with Singapore Financial Reporting Standards (International) (“SFRS(I)”) under the historical cost convention, except as disclosed in the accounting policies below.

The preparation of financial statements in conformity with SFRS(I) requires management to exercise its judgement in the process of applying the Group’s accounting policies. It also requires the use of certain critical accounting estimates and assumptions.

Going concern basis

The Group reported a loss after tax of US$1,541,866 for the financial year ended 31 December 2019. In addition, as at 31 December 2019, the Group’s current liabilities exceeded the current assets by US$2,553,899. Furthermore, the Company’s current liabilities exceeded its current assets by US$1,943,481 at that date. These indicate the existence of material uncertainties that cast significant doubt about the ability of the Group and of the Company to operate as going concerns.

Management has assessed that it is appropriate to use the going concern assumption for the preparation of the accompanying financial statements based on:

(a) its projection of profits and cash flows for the next 12 months from the reporting date;

(b) the ability to draw-down from the shareholders’ loans facility (Note 22); and

(c) the ability to raise additional capital through issuance of convertible bonds.

The projection was developed based on management’s best estimate of revenue and costs and includes cash inflows from secured and unsecured contracts from existing and new customers. The Group has continually explored opportunities to expand into other resource segments such as thermal coal resource with the goal of diversifying its revenue base. While management is actively negotiating for contracts with new customers and there are some uncertainties relating to future contracts, management remains confident that sufficient profitable contracts will be secured. The profitability and cash flow projection for the next 12 months from the reporting date prepared by management resulted in net cash inflows. In addition, subsequent to 31 December 2019, the Company has entered into three convertible bond agreements with 3 subscribers, pursuant to which the Company proposes to issue to the subscribers convertible bonds of up to an aggregate S$25,000,000 in two tranches. On 26 March 2020, the Company has successfully issued convertible bonds of S$2,000,000. Also, as set out in Note 22 to the financial statements, management was successful in negotiating for an extension to the Non-Repayment Period of the loans from shareholders.

NOTES TO THE FINANCIAL STATEMENTSFor the financial year ended 31 December 2019


2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.1 Basis of preparation (continued)

Management is of the view that the Group is able to continue operations and meet its liabilities as and when they fall due within the next 12 months from the reporting date.

Accordingly, the accompanying financial statements does not include any adjustment relating to the realisation and classification of assets and liabilities that may be necessary if the Group and Company were unable to continue as a going concern. Should the going concern assumptions be inappropriate, adjustments may have to be made to (i) reflect the situation that assets may need to be realised other than in the normal course of the business and at amounts which may differ significantly from the amounts at which they are currently recorded in the statements of financial position; (ii) to provide for further liabilities that might arise; and (iii) reclassify non-current assets and non-current liabilities as current. No adjustments have been made in the accompanying financial statements.

Interpretations and amendments to published standards effective in 2019

On 1 January 2019, the Group has adopted the new or amended SFRS(I) and Interpretations of SFRS(I) (“INT SFRS(I)”) that are mandatory for application for the financial year. Changes to the Group’s accounting policies have been made as required, in accordance with the transitional provisions in the respective SFRS(I) and INT SFRS(I).

The adoption of these new or amended SFRS(I) and INT SFRS(I) did not result in substantial changes to the Group’s accounting policies and had no material effect on the amounts reported for the current or prior financial years, except for the adoption of SFRS(I) 16 Leases:

Adoption of SFRS(I) 16 Leases

(a) When the Group is the lessee

Prior to the adoption of SFRS(I) 16, non-cancellable operating lease payments were not recognised as liabilities in the balance sheet. These payments were recognised as rental expenses over the lease term on a straight-line basis.

The Group’s accounting policy on leases after the adoption of SFRS(I) 116 is as disclosed in Note 2.15.

On initial application of SFRS(I) 16, the Group has elected to apply the following practical expedients:

(i) For all contracts entered into before 1 January 2019 and that were previously identified as leases under SFRS(I) 1-17 Lease and SFRS(I) INT 4 Determining whether an Arrangement contains a Lease, the Group has not reassessed if such contracts contain leases under SFRS(I) 16; and





Adoption of SFRS(I) 16 Leases (continued)

(a) When the Group is the lessee (continued)

(ii) On a lease-by-lease basis, the Group has:

(a) applied a single discount rate to a portfolio of leases with reasonably similar characteristics;

(b) relied on previous assessments on whether leases are onerous as an alternative to performing an impairment review;

(c) accounted for operating leases with a remaining lease term of less than 12 months as at 1 January 2019 as short-term leases; and

(d) excluded initial direct costs in the measurement of the right-of-use (“ROU”) asset at the date of initial application.

There were no onerous contracts as at 1 January 2019.

For leases previously classified as operating leases on 1 January 2019, the Group has applied the following transition provisions:

(i) On a lease-by-lease basis, the Group chose to measure its ROU assets (except for ROU assets which meet the definition of investment property) at an amount equal to lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to the lease recognised in the balance sheet immediately before the date of transition.

(ii) Recognised its lease liabilities by discounting the remaining lease payments as at 1 January 2019 using the incremental borrowing rate for each individual lease or, if applicable, the incremental borrowing rate for each portfolio of leases with reasonably similar characteristic.

The effects of adoption of SFRS(I) 16 on the Group’s financial statements as at 1 January 2019 are as follows:

IncreaseUS$

Property, plant and equipment 133,519Borrowings 133,519





Adoption of SFRS(I) 16 Leases (continued)

An explanation of the differences between the operating lease commitments previously disclosed in the Company’s financial statements as at 31 December 2018 and the lease liabilities recognised in the balance sheet as at 1 January 2019 are as follows:

US$

Operating lease commitments disclosed as at 31 December 2018 169,081Less: Discounting effect using weighted average incremental borrowing rate of 6% (5,476)Less: Short term leases (30,086)

Lease liabilities recognised as at 1 January 2019 133,519

2.2 Revenue recognition

Sales comprise the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the Group’s activities. Sales are presented, net of value-added tax, rebates and discounts, and after eliminating sales within the Group. A sale is recognised when control has been transferred. This is usually when title and insurance risk have passed to the customer and the goods have been delivered to a contractually agreed location.

(a) Sale of goods – coal

Revenue from the sale of coal is recognised when control of the coal has transferred to the customer. Revenue is recognised at the point in time when the coal has been delivered to a contractually agreed location by its customers and the customers have accepted the coal in accordance with the sales contract. Consequentially, a receivable is recognised by the Group as this represents the point in time at which the right to consideration becomes unconditional, as only the passage of time is required before payment is due.

For contracts which contain separate performance obligations for the sale of coal and the provision of freight services, the portion of revenue representing the obligation to perform the freight service is deferred and recognised over time as the obligation is fulfilled, along with the associated costs.

(b) Interest income

Interest income is recognised using the effective interest method.

2.3 Government grants

Grants from the government are recognised as a receivable at their fair value when there is reasonable assurance that the grant will be received and the Group will comply with all the attached conditions.

Government grants receivable are recognised as income over the periods necessary to match them with the related costs which they are intended to compensate, on a systematic basis. Government grants relating to expenses are shown separately as other income.

Government grants relating to assets are deducted against the carrying amount of the assets.




2.4 Group accounting

(a) Subsidiaries

(i) Consolidation

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.

In preparing the consolidated financial statements, transactions, balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment indicator of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests comprise the portion of a subsidiary’s net results of operations and its net assets, which is attributable to the interests that are not owned directly or indirectly by the equity holders of the Company. They are shown separately in the consolidated statement of comprehensive income, statement of changes in equity, and balance sheet. Total comprehensive income is attributed to the non-controlling interests based on their respective interests in a subsidiary, even if this results in the non-controlling interests having a deficit balance.

The acquisition method of accounting is used to account for business combinations entered into by the Group.

(ii) Acquisitions

The consideration transferred for the acquisition of a subsidiary or business comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes any contingent consideration arrangement and any pre-existing equity interest in the subsidiary measured at their fair values at the acquisition date.

Acquisition-related costs are expensed as incurred.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.

On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree at the date of acquisition either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets.

The excess of (a) the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the (b) fair value of the identifiable net assets acquired is recorded as goodwill.




2.4 Group accounting (continued)

(a) Subsidiaries (continued)

(iii) Disposals

When a change in the Group’s ownership interest in a subsidiary results in a loss of control over the subsidiary, the assets and liabilities of the subsidiary including any goodwill are derecognised. Amounts previously recognised in other comprehensive income in respect of that entity are also reclassified to profit or loss or transferred directly to retained earnings if required by a specific Standard.

Any retained equity interest in the entity is remeasured at fair value. The difference between the carrying amount of the retained interest at the date when control is lost and its fair value is recognised in profit or loss.

Please refer to the paragraph “Investments in subsidiaries” for the accounting policy on investments in subsidiaries in the separate financial statements of the Company.

(b) Transactions with non-controlling interests

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control over the subsidiary are accounted for as transactions with equity owners of the Company. Any difference between the change in the carrying amounts of the non-controlling interest and the fair value of the consideration paid or received is recognised within equity attributable to the equity holders of the Company.

2.5 Property, plant and equipment

(a) Measurement

All property, plant and equipment except for freehold land is initially recognised at cost and is subsequently carried at cost less accumulated depreciation and accumulated impairment loss.

Freehold land is stated at cost and is not depreciated.

(b) Depreciation

Except for assets under construction and freehold land which are not depreciated, depreciation on other items of property, plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as follows:

Useful lives

Motor vehicles 5 yearsFurniture and fittings 3 – 5 yearsEquipment 3 – 20 years

The residual values, estimated useful lives and depreciation method of property, plant and equipment are reviewed, and adjusted as appropriate, at each balance sheet date. The effects of any revision are recognised in profit or loss when the changes arise.




2.5 Property, plant and equipment (continued)

(c) Subsequent expenditure

Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably. All other repair and maintenance expenses are recognised in profit or loss when incurred.

(d) Disposal

On disposal of an item of property, plant and equipment, the difference between the disposal proceeds and its carrying amount is recognised in profit or loss within “other gains and (losses)”. Any amount in revaluation reserve relating to that item is transferred to retained profits directly.

2.6 Mining properties

Mining properties are stated at cost less accumulated amortisation, and include costs transferred from exploration and evaluation expenditure once technical feasibility and commercial viability of an area of interest are demonstrable, and subsequent costs to develop the mine to the production phase.

The mining properties balance are amortised using the units-of-production method based on estimated coal reserves from commencement of commercial production.

2.7 Investments in subsidiaries

Investments in subsidiaries are carried at cost less accumulated impairment losses in the Company’s balance sheet. On disposal of such investments, the difference between disposal proceeds and the carrying amounts of the investments are recognised in profit or loss.

2.8 Impairment of non-financial assets

Property, plant and equipment, mining properties, exploration and evaluation expenditure and investments in subsidiaries

Property, plant and equipment, mining properties, exploration and evaluation expenditure and investments in subsidiaries are tested for impairment whenever there is any objective evidence or indication that these assets may be impaired.

For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash inflows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the cash-generating-units (“CGU”) to which the asset belongs.

If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.




2.8 Impairment of non-financial assets (continued)

Property, plant and equipment, mining properties, exploration and evaluation expenditure and investments in subsidiaries (continued)

The difference between the carrying amount and recoverable amount is recognised as an impairment loss in profit or loss.

An impairment loss for an asset is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of this asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortisation or depreciation) had no impairment loss been recognised for the asset in prior years.

A reversal of impairment loss for an asset is recognised in profit or loss.

2.9 Financial assets

(a) Classification and measurement

The Group classifies its financial assets as amortised cost.

The classification depends on the Group’s business model for managing the financial assets as well as the contractual terms of the cash flows of the financial assets.

The Group reclassifies debt instruments when and only when its business model for managing those assets changes.

(i) At initial recognition

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.

(ii) At subsequent measurement

Debt instrument

Debt instruments of the Group comprise of cash and cash equivalents, restricted cash, and trade and other receivables.

The Group managed this group of financial assets by collecting the contractual cash flow and these cash flows represents solely payment of principal. Accordingly, these group of financial assets are measured at amortised cost subsequent to initial recognition.

A gain or loss on a debt instrument that is subsequently measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when the asset is derecognised or impaired.




2.9 Financial assets (continued)

(b) Impairment

The Group assesses on forward looking basis the expected credit losses associated with its debt instruments carried at amortised cost.

For trade receivables, the Group applies the simplified approach permitted by the SFRS(I) 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

The general 3-stage approach is applied for other receivables, deposits, cash and cash equivalent and restricted cash. Credit loss allowance is based on 12-month expected credit loss if there is no significant increase in credit risk since initial recognition of the assets. If there is a significant increase in credit risk since initial recognition, lifetime expected credit loss will be calculated and recognised.

2.10 Borrowing costs

Borrowing costs are recognised in profit or loss using effective interest rate method.

2.11 Exploration and evaluation expenditure

Exploration and evaluation expenditure incurred is capitalised and carried forward, on an area of interest basis, provided one of the following conditions is met:

(i) the rights of tenure of exploring and evaluating an area are current and it is considered probable that the costs will be recouped through successful development and exploitation of the area of interest, or alternatively by its sale; or

(ii) exploration activities in the area of interest have not yet reached the stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in or in relation to the area are continuing.

Ultimate recoupment of exploration and evaluation expenditure carried forward is dependent upon successful development and commercial exploitation, or alternatively, sale of the respective area and is reviewed at the end of each accounting period. Exploration and evaluation expenditure in respect of an area of interest, which has been abandoned, or for which a decision has been made by the Company’s directors against the commercial viability of the area of interest are written-off in the period the decision is made.

Exploration and evaluation expenditure represents the accumulated costs relating to general investigation, administration and licensing, geology and geophysics expenditures.

Exploration and evaluation expenditure are assessed for impairment if facts and circumstances indicate that impairment may exist.

Cash flows associated with exploration and evaluation expenditure are classified as investing activities in the consolidated statement of cash flows.




2.12 Borrowings

Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for at least 12 months after the balance sheet date, in which case they are presented as non-current liabilities.

Borrowings are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

2.13 Trade and other payables

Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. They are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). Otherwise, they are presented as non-current liabilities.

Trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost using the effective interest method.

2.14 Fair value estimation of financial assets and liabilities

The fair values of current financial assets and liabilities carried at amortised cost approximate their carrying amounts.

2.15 Leases

(a) The accounting policy for lease before 1 January 2019 are as follows:

(i) When Group is a lessee:

The Group leases motor vehicles, equipment and office space under finance and operating leases from non-related parties.

• Lessee – Finance leases

Leases where the Group assumes substantially all risks and rewards incidental to ownership of the leased assets are classified as finance leases.

The leased assets and the corresponding lease liabilities (net of finance charges) under finance leases are recognised on the balance sheet as equipment and borrowings respectively, at the inception of the leases based on the lower of the fair value of the leased assets and the present value of the minimum lease payments.

Each lease payment is apportioned between the finance expense and the reduction of the outstanding lease liability. The finance expense is recognised in profit or loss on a basis that reflects a constant periodic rate of interest on the finance lease liability.




2.15 Leases (continued)

(a) The accounting policy for lease before 1 January 2019 are as follows: (continued)

(i) When Group is a lessee: (continued)

• Lessee – Operating lease

Leases where substantially all risks and rewards incidental to ownership are retained by the lessors are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessors) are recognised in profit or loss on a straight-line basis over the period of the lease.

Contingent rents are recognised as an expense in profit or loss when incurred.

(b) The accounting policy for leases from 1 January 2019 are as follows:

(i) When Group is a lessee:

At the inception of the contract, the Group assesses if the contract contains a lease. A contract contains a lease if the contract convey the right to control the use of an identified asset for a period of time in exchange for consideration. Reassessment is only required when the terms and conditions of the contract are changed.

• Right-of-use assets

The Group recognised a right-of-use asset and lease liability at the date which the underlying asset is available for use. Right-of-use assets are measured at cost which comprises the initial measurement of lease liabilities adjusted for any lease payments made at or before the commencement date and lease incentive received. Any initial direct costs that would not have been incurred if the lease had not been obtained are added to the carrying amount of the right-of-use assets.

These right-of-use assets are subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

Right-of-use assets (except for those which meets the definition of an investment property) are presented within “Property, plant and equipment”.

• Lease liabilities

The initial measurement of lease liability is measured at the present value of the lease payments discounted using the implicit rate in the lease, if the rate can be readily determined. If that rate cannot be readily determined, the Group shall use its incremental borrowing rate.




2.15 Leases (continued)

(b) The accounting policy for leases from 1 January 2019 are as follows: (continued)

(i) When Group is a lessee: (continued)

• Lease liabilities (continued)

Lease payments include the following:

– Fixed payment (including in-substance fixed payments), less any lease incentives receivables;

– Variable lease payment that are based on an index or rate, initially measured using the index or rate as at the commencement date;

– Amount expected to be payable under residual value guarantees

– The exercise price of a purchase option if is reasonably certain to exercise the option; and

– Payment of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

For contracts that contain both lease and non-lease components, the Group allocates the consideration to each lease component on the basis of the relative stand-alone price of the lease and non-lease component. The Group has elected to not separate lease and non-lease component for property leases and account these as one single lease component.

Lease liability is measured at amortised cost using the effective interest method. Lease liability shall be remeasured when:

– There is a change in future lease payments arising from changes in an index or rate;

– There is a change in the Group’s assessment of whether it will exercise an extension option; or

– There are modification in the scope or the consideration of the lease that was not part of the original term.

Lease liability is remeasured with a corresponding adjustment to the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

• Short term and low value leases

The Group has elected to not recognise right-of-use assets and lease liabilities for short-term leases that have lease terms of 12 months or less and leases of low value leases, except for sublease arrangements. Lease payments relating to these leases are expensed to profit or loss on a straight-line basis over the lease term.




2.16 Inventories

Inventories are carried at the lower of cost and net realisable value. Cost is determined using the weighted average method. The cost of finished goods comprises direct labour, other direct cost, amortisation of mining properties, depreciation of fixed assets and related production overheads. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and applicable variable selling expenses.

2.17 Income taxes

Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction.

A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised.

Deferred income tax is measured:

(i) at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date; and

(ii) based on the tax consequence that will follow from the manner in which the Group expects, at the balance sheet date, to recover or settle the carrying amounts of its assets and liabilities except for investment properties. Investment property measured at fair value is presumed to be recovered entirely through sale.

Current and deferred income taxes are recognised as income or expense in profit or loss, except to the extent that the tax arises from a business combination or a transaction which is recognised directly in equity. Deferred tax arising from a business combination is adjusted against goodwill on acquisition.

2.18 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated.




2.19 Mine reclamation and rehabilitation

Mine reclamation and rehabilitation expenditures are costs associated with mine reclamation during the mine operation period, mine closure and decommissioning and demobilisation of facilities and other closure activities.

Provision for estimated costs of mine reclamation and rehabilitation and provision for mine closure are recorded on an incremental basis based on the quantity produced. The rate used is subject to a regular review based on mine reclamation and mine closure plans.

2.20 Employee compensation

Employee benefits are recognised as an expense, unless the cost qualifies to be capitalised as an asset.

(a) Pension benefits

The Group operates both defined benefit and defined contribution post-employment benefit plans.

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities such as the Central Provident Fund on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The Group’s contribution are recognised as employee compensation expense when they are due.

Defined benefit plans are post-employment benefit plans other than defined contribution plans. Defined benefit plans typically defined the amount of benefit that an employee will receive on or after retirement, usually dependent on one or more factor such as age, years of service and compensation.

The liability recognised in the balance sheet in respect of a defined benefit pension plan is present value of the defined benefit obligation at the reporting date less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash flows using market yields of high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and have tenures approximating to that of the related post-employment benefit obligations.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income in the period where they arise. The experience adjustments are not to be reclassified to profit or loss in a subsequent period.

Past service costs are recognised immediately in profit or loss.




2.20 Employee compensation (continued)

(b) Share-based compensation

The Group operates equity-settled, share-based compensation plans, where shares are issued by the Company to eligible executives and directors of the Group. The value of the employee services received in exchange for the grant of the shares is recognised as an expense with a corresponding entry to reserves over the vesting period. The total amount to be expensed over the vesting period is determined by reference to the fair value of the shares granted at the grant date and the number of shares vested by vesting date, excluding the impact of any non-market vesting conditions. Non-market vesting conditions are included in the estimates of the number of shares that are expected to become vested.

The fair value of services received from the employees of the Company and its subsidiaries in exchange for the grant of the shares are essentially services rendered in the past, are charged out to profit or loss immediately. Before the end of the vesting period, at each reporting date, the Company will revise its estimates of the number of shares that are expected to be vested at the vesting date and it recognises the impact of this revision in profit or loss with a corresponding adjustment to equity. After the vesting date, no adjustment to profit or loss is made. For performance shares that are expected to be granted, due to services received before grant date, the total amount to be recognised over the vesting period is determined by reference to the fair value of the performance shares at the end of the reporting period, until the date of grant has been established.

2.21 Currency translation

(a) Functional and presentation currency

Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The financial statements are presented in United States Dollar as the comparable companies in the industry in which the Group operates in also present its financial statements in United States Dollar. The functional currency of the Company is Singapore Dollar.

(b) Transactions and balances

Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates at the dates of the transactions. Currency exchange differences resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the balance sheet date are recognised in profit or loss. Monetary items include primarily financial assets (other than equity investments), contract assets and financial liabilities. However, in the consolidated financial statements, currency translation differences arising from borrowings in foreign currencies and other currency instruments designated and qualifying as net investment hedges and net investment in foreign operations, are recognised in other comprehensive income and accumulated in the currency translation reserve.

When a foreign operation is disposed of or any loan forming part of the net investment of the foreign operation is repaid, a proportionate share of the accumulated currency translation differences is reclassified to profit or loss, as part of the gain or loss on disposal.




2.21 Currency translation (continued)

(b) Transactions and balances (continued)

Foreign exchange gains and losses impacting profit or loss are presented in the statement of comprehensive income within “other gains/(losses)”.

Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at the date when the fair values are determined.

(c) Translation of Group entities’ financial statements

The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i) assets and liabilities are translated at the closing exchange rates at the reporting date;

(ii) income and expenses are translated at average exchange rates (unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the dates of the transactions); and

(iii) all resulting currency translation differences are recognised in other comprehensive income and accumulated in the currency translation reserve. These currency translation differences are reclassified to profit or loss on disposal or partial disposal with loss of control of the foreign operation.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and translated at the closing rates at the reporting date.

2.22 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the executive committee whose members are responsible for allocating resources and assessing performance of the operating segments.

The Executive Committee (“Exco”) is the Group’s chief operating decision maker. Exco comprises the Chief Executive Officer, the Chief Financial Officer and Head of Mining. Management has determined the operating segments based on the reports reviewed by the Exco that are used to make strategic decision, allocate resources and assess performance.

2.23 Cash and cash equivalents

For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents include cash on hand and deposits with financial institutions which are subject to an insignificant risk of change in value.




2.24 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against the share capital account.

3. REVENUE

At a point in time Over time Total

US$ US$ US$

2019Coal sales 8,225,647 – 8,225,647Provision for freight services – 2,808,344 2,808,344

8,225,647 2,808,344 11,033,991

At a point in time Over time Total

US$ US$ US$

2018Coal sales 4,414,789 – 4,414,789Provision for freight services – 1,233,065 1,233,065

4,414,789 1,233,065 5,647,854

There is no unsatisfied performance obligation as at 31 December 2019 and 2018.

4. OTHER INCOME AND OTHER GAINS/(LOSSES)

Group2019 2018US$ US$

Other incomeInterest income 11,142 10,754Others 3,445 21

14,587 10,775

Other gains/(losses)Currency exchange gains/(losses) – net 126,486 (300,318)Loss on disposal of property, plant and equipment (885) (14,271)

125,601 (314,589)



5. FINANCE EXPENSES


Interest expense– Borrowings 510,525 153,639– Lease liabilities/finance lease liabilities 3,739 41– Loans from shareholders 206,288 216,746

720,552 370,426

6. EXPENSES BY NATURE


(restated)

Mining costs 5,396,622 4,116,804Transportation costs 2,936,855 970,589Royalties 504,929 220,525Employee compensation:– Wages and salaries 823,183 1,134,482– Defined benefit expense 68,872 6,112– Employer’s contribution to defined contributions plans including

Central Provident Fund 57,448 47,170– Share-based payments 50,297 68,199– Others 3,522 1,257Directors’ fees 131,117 346,181Medical expenses 9,926 11,309Depreciation of property, plant and equipment (Note 17) 123,095 211,918Travelling expenses 150,886 191,464Licensing and compliance costs 321,562 376,543Sponsor fees 87,904 88,984Legal expenses 17,913 18,339Rental expenses 56,222 250,561Representative expenses 18,808 12,528Corporate social responsibility expenses 29,003 4,748Professional fees 408,841 574,054Geologist and surveyor fees 38,281 633,731Printing and supplies 27,840 41,794Selling and marketing 66,370 97,413Impairment of exploration and evaluation expenditure (Note 14) – 1,291,261Impairment of mining properties (Note 15) 139,455 7,143,035Impairment of property, plant and equipment (Note 17) 4,865 5,485,705Impairment of prepayment – 117,664Others 518,204 435,554

Total cost of sales, administrative and other expenses 11,992,020 23,897,924



7. INCOME TAXES

(a) Income tax expense


Tax expense attributable to profit is made up of:Current income tax– current year 103 1,030

The tax on the Group’s loss before tax differs from the theoretical amount that would arise using the Singapore standard rate of income tax as follows:


(restated)

Loss before tax (1,541,763) (18,924,310)

Tax calculated at tax rate of 17% (2018: 17%) (262,100) (3,217,133)Effects of:– different tax rates in other countries 55,050 (1,403,452)– expenses not deductible for tax purposes 500,877 5,380,026– unutilised tax losses not recognised – (760,241)– utilisation of previously unrecognised tax losses (297,601) –– income not subject to tax 3,877 1,830

Tax charge 103 1,030

As at 31 December 2019, the subsidiaries of the Group had an estimated unutilised income tax losses of approximately US$6,966,404 (2018: US$8,454,317). The unutilised income tax losses are available for set-off against future taxable profits, subject to the agreement of the relevant tax authorities and compliance with certain provisions of the income tax regulations of the respective countries in which the subsidiaries operate. The unutilised tax losses will expire at various dates up to and including 2024.

(b) The tax charge relating to each component of other comprehensive income is as follows:

Group 2019 2018 Before tax Tax charge After tax Before tax Tax charge After tax

US$ US$ US$ US$ US$ US$

Currency translation differences arising from consolidation of subsidiaries (169,813) – (169,813) (1,068,062) – (1,068,062)

Other comprehensive loss (169,813) – (169,813) (1,068,062) – (1,068,062)



8. LOSSES PER SHARE

(a) Basic losses per share

Basic losses per share is calculated by dividing the net loss attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the financial year.

2019 2018(restated)

Net losses attributable to equity holders of the Company (US$) (1,542,349) (18,756,159)Weighted average number of ordinary shares outstanding for

basic losses per share 965,351,624 933,916,601

Basic losses per share (US cents per share) (0.16) (2.01)

(b) Diluted losses per share

For the purpose of calculating diluted loss per share, losses attributable to equity holders of the Company and the weighted average number of ordinary shares outstanding are adjusted for the effects of all dilutive potential ordinary shares.

For share awards, the weighted average number of shares on issue has been adjusted as if all dilutive share awards were vested.

Diluted earnings per share attributable to equity holders of the Company is calculated as follows:

2019 2018(restated)

Weighted average number of ordinary shares outstanding for basic losses per share 965,351,624 933,916,601

Adjustment for:– BlackGold Share Award Scheme – 1,073,500

965,351,624 934,990,101

Diluted losses per share (US cents per share) (0.16) (2.01)

9. CASH AND CASH EQUIVALENTS

Group Company2019 2018 2019 2018US$ US$ US$ US$

Cash at bank and on hand 89,132 547,816 1,528 26,649



10. TRADE AND OTHER RECEIVABLES – CURRENT


Trade receivables– Non-related parties 4,804,504 1,419,982 – –Other receivables– Non-related parties 56,052 19,795 31,938 14,866– Subsidiaries – – 22,918,632 22,533,413– Non-controlling shareholder of

a subsidiary 8,655 8,301 – –

4,869,211 1,448,078 22,950,570 22,548,279Less: Loss allowance (3,370) – (22,918,632) (22,533,413)

4,865,841 1,448,078 31,938 14,866

Trade receivables net of loss allowance as at 1 January 2018 amounted to US$1,041,519.

The carrying amounts of the trade receivables include receivables which are subject to a factoring arrangement. Under this arrangement, the Group has transferred the relevant receivables to the factor in exchange for cash and is prevented from selling or pledging the receivables. However, the Group has retained late payment and credit risks. The Group therefore continues to recognise the transferred assets in their entirety on its balance sheet. The amount repayable under the factoring agreement is presented as borrowing. The Group considers that the held to collect business model remains appropriate for these receivables and hence continue to measure them at amortised cost. The relevant carrying amount as at 31 December 2019 is US$2,813,983 (2018: nil).

The balances due from subsidiaries and non-controlling shareholder of a subsidiary are non-trade in nature, unsecured, interest-free and repayable on demand.

11. INVENTORIES


Coal, at cost 405,659 1,882,602

The cost of inventories recognised as an expense and included in “cost of sales” amounted to US$5,396,622 (2018: US$4,116,804).

12. DEPOSITS AND PREPAYMENTS


(restated)

CurrentDeposits 9,912 22,946 9,623 –Prepayments 459,943 170,825 3,608 5,958

469,855 193,771 13,231 5,958



13. RESTRICTED CASH


Escrows 171 24,497Time deposits 185,363 177,781

185,534 202,278

Time deposits are security deposit placed in Bank Kepulauan Riau until the expiry of the Mining Business Licence (Izin Usaha Pertambangan, “IUP”) on 26 February 2023 as required by the Department of Mining and Energy of the Regency of Riau, Indonesia.

Interest rates on time deposit during 31 December 2019 were 6% (2018: 6.0%) per annum.

14. EXPLORATION AND EVALUATION EXPENDITURE


Beginning of the financial year – 1,406,942Impairment loss (Note 6) – (1,291,261)Currency translation differences – (115,681)

End of financial year – –

15. MINING PROPERTIES


(restated)

CostBeginning of the financial year 7,429,369 7,913,224Additions 139,455 –Currency translation differences – (483,855)

End of financial year 7,568,824 7,429,369

Accumulated amortisation and impairment lossBeginning of the financial year (as previously reported) 122,300 78,176Prior year adjustment (Note 34) 7,307,069 –

Beginning of financial year (as restated) 7,429,369 78,176Impairment loss (Note 6) 139,455 7,143,035Amortisation charge – 48,904Currency translation differences – 159,254


Net carrying value at end of the financial year – –



16. INVESTMENTS IN SUBSIDIARIES

Company2019 2018US$ US$

(restated)

Equity investments at costBeginning and end of financial year 123,409,681 123,409,681Less: Allowance for impairment (123,408,974) (123,408,974)

707 707

The movements in allowance for impairment are as follows:


(restated)

Beginning of the financial year (as previously stated) 110,093,106 30,656,705Prior year adjustment 13,315,868 –

Beginning of the financial year (as restated) 123,408,974 30,656,705Allowance charged to profit or loss – 92,752,269


The Group has the following subsidiaries as at 31 December 2019 and 2018:

NamePrincipal activities

Country of business/

incorporation

Proportion of ordinary shares

directly held by Group

Proportion of ordinary shares directly held by non-controlling

interests2019 2018 2019 2018

% % % %

Held by the Company1 BlackGold Asia Resources Pte. Ltd.(a) Investment

holdingSingapore 100 100 – –

2 BlackGold Energy Limited(c) Investment holding

Hong Kong 100 100 – –

3 BlackGold Power Pte. Ltd.(a) Investment holding

Singapore 100 100 – –

Held by the subsidiaries4 PT BlackGold Energy Indonesia(b) Investment

holdingIndonesia 99 99 1 1

5 PT BlackGold Energy Power(b) Investment holding

Indonesia 99 99 1 1

6 PT Samantaka Batubara(b) Coal mining Indonesia 99 99 1 17 PT Ausindo Prima Andalas(b) Coal mining Indonesia 99 99 1 18 PT Ausindo Andalas Mandiri(b) Coal mining Indonesia 99 99 1 1

(a) Audited by PricewaterhouseCoopers LLP, Singapore(b) Audited by KAP Tanudiredja, Wibisana, Rintis dan Rekan, PwC Indonesia, for the purpose of preparation of

consolidated financial statements of the Group(c) Audited by Heng & Tan, Certified Public Accountants, Hong Kong

The Directors are of the view that the non-controlling interests in subsidiaries are not material to the Group.



17. PROPERTY, PLANT AND EQUIPMENT

Freehold Land

Motor vehicles

Furniture and fittings Equipment

Leasehold properties Total

US$ US$ US$ US$ US$ US$

Group2019CostBeginning of financial year 1,164,365 53,971 12,558 4,935,518 – 6,166,412Adoption of SFRS (I) 16

(Note 2.1) – – – – 133,519 133,519Additions – – – 4,932 246,035 250,967Disposals – – (11,347) (7,202) (173,853) (192,402)Currency translation

differences – – 164 209,267 4,925 214,356

End of financial year 1,164,365 53,971 1,375 5,142,515 210,626 6,572,852

Accumulated depreciation and impairment losses

Beginning of financial year (as previously reported) – 53,971 11,616 486,356 – 551,943

Prior year adjustment (Note 34) 1,164,365 – – 4,447,316 – 5,611,681

Beginning of financial year (as restated) 1,164,365 53,971 11,616 4,933,672 – 6,163,624

Depreciation charge – – 451 320 122,324 123,095Impairment losses (Note 6) – – – 4,865 – 4,865Disposals – – (11,347) (6,637) (14,488) (32,472)Currency translation

differences – – 158 209,335 (2,469) 207,024

End of financial year 1,164,365 53,971 878 5,141,555 105,367 6,466,136

Net book valueEnd of financial year – – 497 960 105,259 106,716



17. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)

Freehold Land

Motor vehicles


Assets under

construction TotalUS$ US$ US$ US$ US$ US$

Group2018CostBeginning of financial year 496,020 57,485 11,425 5,232,959 13,479 5,811,368Additions 698,674 – 1,357 25,099 – 725,130Disposals – – – (4,071) (13,479) (17,550)Currency translation

differences (30,329) (3,514) (224) (318,469) – (352,536)

End of financial year 1,164,365 53,971 12,558 4,935,518 – 6,166,412

Accumulated depreciation and impairment losses

Beginning of financial year – 57,485 11,277 155,597 – 224,359Depreciation charge – – 148 348,285 – 348,433Disposals – – – (3,279) – (3,279)Impairment losses (Note 6) 1,138,225 – – 4,347,480 – 5,485,705Currency translation

differences 26,140 (3,514) 191 85,589 – 108,406

End of financial year (as restated) 1,164,365 53,971 11,616 4,933,672 – 6,163,624

Net book valueEnd of financial year

(as restated) – – 942 1,846 – 2,788

Total depreciation of property, plant and equipment was allocated as follows:


Administrative expenses 123,095 211,918Cost of sales – 14,828Capitalised as inventory – 121,687

123,095 348,433



17. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)


Leasehold property Total

US$ US$ US$ US$

Company2019CostBeginning of financial year 1,357 14,059 – 15,416Adoption of SFRS (I) 16 – – 75,886 75,886Disposals – (1,966) – (1,966)Currency translation differences 18 182 1,035 1,235

End of financial year 1,375 12,275 76,921 90,571

Accumulated depreciationBeginning of financial year 415 12,213 – 12,628Depreciation charge 451 320 1,504 2,275Disposals – (1,400) – (1,400)Currency translation differences 12 183 21 216

End of financial year 878 11,316 1,525 13,719

Net book valueEnd of financial year 497 959 75,396 76,852

Furniture and fittings Equipment Total

US$ US$ US$

Company2018CostBeginning of financial year – 14,355 14,355Additions 1,357 880 2,237Currency translation differences – (1,176) (1,176)

End of financial year 1,357 14,059 15,416

Accumulated depreciationBeginning of financial year – 7,889 7,889Depreciation charge 148 4,631 4,779Currency translation differences 267 (307) (40)

End of financial year 415 12,213 12,628

Net book valueEnd of financial year 942 1,846 2,788



18. LEASES – THE GROUP AND THE COMPANY AS A LESSEE

Nature of the Group’s leasing activities – Group as a lessee

Leasehold properties

The Group leases office space for the purpose of back office operations.

There are no externally imposed covenant on the lease arrangements.

(a) Carrying amounts

ROU assets classified within Property, plant and equipment

31 December 2019

1 January 2019

$ US$

Leasehold properties 105,259 133,519

(b) Depreciation charged during the year

2019US$

Leasehold properties 122,324

(c) Interest expense

2019US$

Interest expense on lease liabilities 3,739

(d) Lease expense not capitalised in lease liabilities

Lease expense – short-term leases 31,952

(e) Total cash outflow for the leases excluding short-term leases in 2019 is US$124,256.

(f) Addition of ROU assets during the financial year 2019 was US$246,035.

(g) Disposal of ROU assets during the financial year 2019 was US$159,365 as the lease contract was terminated.

(h) Future cash outflow which are not capitalised in lease liabilities. The leases contain extension periods, for which the related lease payments had not been included in lease liabilities as the Group not reasonably certain to exercise these exercise option. The Group negotiates extension options to optimise operational flexibility in terms of managing the assets used in the Group’s operations. The extension options are exercisable by the Group and not by the lessor.



18. LEASES – THE GROUP AND THE COMPANY AS A LESSEE (CONTINUED)

Nature of the Company’s leasing activities – Company as a lessee

The Company leases office space for the purpose of back office operations.

There are no externally imposed covenant on the lease arrangements.

(a) Carrying amounts

ROU assets classified within Property, plant and equipment

31 December 2019

1 January 2019

$ US$

Leasehold properties 75,396 –

(b) Depreciation charged during the year

2019US$

Leasehold property 1,504

(c) Interest expense

2019US$

Interest expense on lease liabilities 102

(d) Total cash outflow for the leases excluding short-term leases in 2019 is US$1,556.

(e) Addition of ROU assets during the financial year 2019 was US$75,886.

(f) Future cash outflow which are not capitalised in lease liabilities. The lease contain extension periods, for which the related lease payments had not been included in lease liabilities as the Company not reasonably certain to exercise these exercise option. The Company negotiates extension options to optimise operational flexibility in terms of managing the assets used in the Company’s operations. The extension option is exercisable by the Company and not by the lessor.



19. TRADE AND OTHER PAYABLES


Trade payables to:– Non-related parties 823,310 1,725,509 – –Other payables to:– Non-related parties 646,915 569,567 424,100 323,602– Subsidiaries – – 875,972 701,432Remuneration payable to:– Directors 165,145 32,000 165,145 32,000– Others – 8,215 – 8,215Amounts payable to non-controlling

shareholder of subsidiaries 7,581 7,581 – –

1,642,951 2,342,872 1,465,217 1,065,249

Other payables due to subsidiaries and non-controlling shareholder of subsidiaries are unsecured, interest-free and repayable on demand.

20. ACCRUED OPERATING EXPENSES


Accrued operating expenses for– Dead rent 1,926,329 1,601,443 – –– Professional fees 313,870 265,199 293,439 250,862– Directors’ fee 138,185 9,682 137,454 9,682– Mining services 323,978 152,186 – –– Royalties 595,697 125,289 – –– Others 533,966 354,177 56,806 49,781

3,832,025 2,507,976 487,699 310,325

During the duration of the licence (Note 13), the Company is required to pay rent (“dead rent”) which is based on the number of hectares covered by the mining concession, as well as the stage of mining operations.

21. PROVISIONS

Movements in provision for mine reclamation and rehabilitation are as follows:


Beginning of financial year 110,972 101,230Provision for the financial year 66,710 15,932Currency translation differences 43,783 (6,190)

End of financial year 221,465 110,972

The fair value of provision for mine reclamation and rehabilitation approximate the carrying amounts.



22. LOANS FROM SHAREHOLDERS

The Group entered into shareholders’ loan agreements with Twin Gold Ventures S.A. and Novel Creation Holdings Limited (together, the “Lenders”) on 20 December 2012 and 26 March 2013 for a facility of US$40,000,000 in aggregate. The loans drawn under the facility are unsecured, interest-free and repayable on demand.

On 20 March 2019, the shareholders entered into a fifth supplemental deed to the shareholders’ loan agreements where the Lenders agreed that they would not demand for repayment of all or any part of the loans from shareholders to 31 March 2021 (“Non-Repayment Period”).

The Group currently has a remaining undrawn facility amount of approximately US$35.8 million on the loans from shareholders.

The carrying value of loans from shareholders approximate its fair value. The fair values are determined from the cash flow analyses, discounted at market borrowing rates of an equivalent instrument at the balance sheet date of 6.6% (2018: 6.6%) which the directors expect to be available to the Group.

23. OTHER NON-CURRENT LIABILITIES


Obligations recognised in balance sheet for:– Defined pension benefits 153,542 83,279

Expenses charged to profit or loss:– Defined pension benefits 68,872 6,112

The movement in the defined benefit obligation is as follows:

Present value of

obligationUS$

GroupAt 1 January 2019 83,279Current service cost 63,632Interest expense 5,240

152,151

Currency translation differences 4,754Payment from plans:– Benefits payments (3,363)

As 31 December 2019 153,542



23. OTHER NON-CURRENT LIABILITIES (CONTINUED)

Present value of

obligationUS$

GroupAt 1 January 2018 82,412Current service cost 723Interest expense 5,389

88,524

Currency translation differences (5,245)Payment from plans:– Benefits payments –

As 31 December 2018 83,279

The significant actuarial assumptions used were as follows:

Group 2019 2018

Discount rate 8.1% 7.5%Salary growth rate 5.0% 5.0%

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:

Group Impact on defined benefit obligationChange in

assumptionIncrease in assumption

Decrease in assumption

Discount rate 1.0% Decrease by 5.33% Increase by 6.02%Salary growth rate 1.0% Increase by 6.09% Decrease by 5.48%

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied when calculating the pension liability recognised within the statement of financial position.

The methods and type of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.



24. BORROWINGS


CurrentBorrowings 2,843,682 1,141,421 – –Lease liabilities 65,506 – 36,941 –

2,909,188 1,141,421 36,941 –Non-currentLease liabilities 38,592 – 35,936 –

Total borrowings 2,947,780 1,141,421 72,877 –

The Group borrowings comprise fixed rate loan, profit sharing loan and factoring arrangement.

The fixed rate loan is unsecured, bears interest at 2% (2018: 2%) per month and has been fully repaid during the financial year ended 31 December 2019.

The profit sharing is an unsecured loan facility denominated in IDR of up to approximately equivalent of US$3,600,000 and can be drawn down based on the working capital required for the production. The interest is calculated based on 50% of net profit of each shipment as defined in the loan agreement. The Group will repay the amount drawn down and interest upon the collection of sales proceeds. As of 31 December 2019, US$29,699 (2018: U$631,000) has been drawn down.

During the year, the Group has entered into a factoring agreement with a financial institution in which certain accounts receivables were transferred with recourse to the financial institution. The factoring arrangement is a secured facility denominated in IDR of up to approximately equivalent of US$3,600,000. Under the factoring arrangement, the financial institution pays an amount net of discount to the Group and collects the factored accounts receivables balances directly from customers. The discount cost 9.5% of the balance transferred and is included in “finance cost”. For the year ended 31 December 2019, the Group has received proceeds from the sales of account receivables amounting to US$2,546,655.

25. SHARE CAPITAL

No. of ordinary

shares issuedAmount of

share capitalAmount of

share capitalCompany & US$ US$

Group Group Company

2019Beginning of financial year 936,610,437 55,619,594 170,716,789Issuance of placement shares 63,333,333 693,228 693,228Shares issued as share awards 3,800,000 – –

End of financial year 1,003,743,770 56,312,822 171,410,017

2018Beginning of financial year 930,860,437 55,619,594 170,716,789Shares issued as share awards 5,750,000 – –

End of financial year 936,610,437 55,619,594 170,716,789



25. SHARE CAPITAL (CONTINUED)

During the financial year, the Company issued 3,800,000 (FY2018: 5,750,000) ordinary shares as share awards under the BlackGold Share Award Scheme (Note 26).

On 10 March 2015, the Company completed its acquisition of the entire share capital of BlackGold Asia Resources Pte. Ltd., BlackGold Energy Limited and their subsidiaries (collectively, the “BlackGold Group”) via the issuance of new ordinary shares in the Company to the shareholders of the BlackGold Group (“Reverse Acquisition”).

The Reverse Acquisition is a reverse takeover of the Company as the shareholders of the BlackGold Group became the controlling shareholders of the Company on completion of the transaction. Accordingly, the BlackGold Group (being the legal subsidiaries in the transaction) is regarded as the accounting acquirer, and the Company (being the legal parent in the transaction) is regarded as the accounting acquiree.

26. OTHER RESERVES


Capital reserve 1,318,479 1,112,193 – –Share awards reserve 296,169 245,872 296,169 245,872

1,614,648 1,358,065 296,169 245,872

Capital reserve represents a fair value adjustment, being the difference between the loans received from shareholders and fair value of the loans computed as a transaction with shareholders in the Group’s statement of changes in equity as at 31 December 2019.

Share awards reserve comprise cumulative fair value of services received from employees measured at the date of grant under the BlackGold Share Award Scheme (the “ESAS”).

On 25 April 2018, the shareholders of the Company approved the adoption of the ESAS for the Initial Period of 1 year. The objective of ESAS is to attract and retain the Group’s executives, executive directors and non-executive directors and allows the Group to manage its fixed overheads.

Under the ESAS, the Company may grant to participants awards which represent the right of such participants to receive fully paid shares free of charge, upon such participants satisfying the criteria set out in the ESAS and such conditions as may be imposed. The number of shares which are the subject of each award shall be determined at the absolute discretion of the Remuneration Committee, which shall take into account various criteria including those set out in the rules of the ESAS. The Company will deliver shares to be received under an award by issuing new shares.

The vesting of performance shares granted under ESAS to employees is subject to the achieving of pre-agreed service and/or performance conditions over the performance period. The vesting of performance shares granted to certain directors vest immediately.



26. OTHER RESERVES (CONTINUED)

Movements in the number of performance shares outstanding are as follows:

Group and Company2019 2018

Beginning of financial year 3,800,000 –Granted – 9,950,000Forfeited – (400,000)Issued (3,800,000) (5,750,000)

End of financial year – 3,800,000

A summary of the performance shares granted to the Directors of the Group since the commencement of the ESAS are set out below:

Number of ESAS granted2019 2018

DirectorsIntekhab Khan (resigned on 2 March 2018) – 2,500,000Phillip Cecil Rickard (resigned on 29 November 2019) – 1,500,000James Rijanto (resigned on 31 July 2019) – 1,500,000Nandakumar Ponniya Servai (resigned on 31 July 2019) – 1,000,000Gerald Lim Thien Su (resigned on 31 July 2019) – 750,000Bala Chandran (resigned on 31 July 2019) – 750,000Bandun Madong Parulian Samosir – 750,000

– 8,750,000

Other than the Directors listed above, no other employee has received 5% or more of the total number of awards granted during the financial year

27. ACCUMULATED LOSSES

Movement in accumulated losses for the Company is as follows:


(restated)

Beginning of financial year (172,792,729) (55,925,647)Net loss (1,296,679) (116,867,082)

End of financial year (174,089,408) (172,792,729)

28. GENERAL RESERVE

The Limited Liability Company Law of the Republic of Indonesia No. 40/2007, introduced in August 2007, requires the establishment of a general reserve from net profits amounting to at least 20% of a company’s issued and paid up capital. There is no set period of time over which this reserve should be established. As at 31 December 2019, the Group has not yet established a general reserve, as it has accumulated losses rather than profits.



29. COMMITMENTS

Operating lease commitments – where the Group is a lessee

The Group leases motor vehicles, equipment and offices from non-related parties under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights.

As at 31 December 2018, the future minimum lease payables under non-cancellable operating leases contracted for at the balance sheet date but not recognised as liabilities, are as follows:

Group2018US$

Not later than one year 131,113Between one and five years 37,968

169,081

As disclosed in Note 2.1, the Group has adopted SFRS(I) 16 on 1 January 2019. These lease payments have been recognised as ROU assets and lease liabilities on the balance sheet as at 31 December 2019, except for short-term and low value leases.

30. FINANCIAL RISK MANAGEMENT

Financial risk factors

The Group’s activities expose it to currency risk, credit risk, liquidity risk and capital risk. The management is responsible for setting the objectives and underlying principles of financial risk management for the Group.

(a) Market risk

(i) Currency risk

The Group operates in Singapore and Indonesia. Entities in the Group regularly transact in currencies other than their respective functional currencies (“foreign currencies”).

Currency risk arises within entities in the Group when transactions are denominated in foreign currencies.



30. FINANCIAL RISK MANAGEMENT (CONTINUED)

Financial risk factors (continued)

(a) Market risk (continued)

(i) Currency risk (continued)

The Group’s currency exposure based on the information provided to key management is as follows:

SGD USD IDR TotalUS$ US$ US$ US$

At 31 December 2019Financial assetsCash and cash equivalents 1,528 2,573 85,031 89,132Restricted cash – – 185,534 185,534Inter-group receivables 23,376,239 1,798,745 3,233,757 28,408,741Trade and other

receivables 33,423 – 4,832,418 4,865,841Deposits 9,912 – – 9,912

23,421,102 1,801,318 8,336,740 33,559,160

Financial liabilitiesTrade and other payables (393,553) (268,494) (871,721) (1,533,768)Accrued operating

expenses (551,252) (566,814) (2,713,959) (3,832,025)Inter-group payables (22,585,933) (1,745,724) (3,277,756) (27,609,413)Loans from shareholders – (3,895,589) – (3,895,589)Borrowings (72,877) – (2,874,903) (2,947,780)

(23,603,615) (6,476,621) (9,738,339) (39,818,575)

Net financial liabilities (182,513) (4,675,303) (1,401,599) (6,259,415)

Financial (liabilities)/assets denominated in the respective entities’ functional currencies (22,379,738) 1,200,147 (2,354,893) (23,534,484)

Currency exposure of financial liabilities, net of those denominated in the respective entities’ functional currencies (22,562,251) (3,475,156) (3,756,492) (29,793,899)








At 31 December 2018 (restated)

Financial assetsCash and cash equivalents 20,026 13,659 514,131 547,816Restricted cash – – 202,278 202,278Inter-group receivables 22,986,167 1,745,724 3,156,501 27,888,392Trade and other

receivables 14,866 – 1,433,212 1,448,078Deposits 22,946 – – 22,946

23,044,005 1,759,383 5,306,122 30,109,510

Financial liabilitiesTrade and other payables (240,230) (139,036) (1,856,653) (2,235,919)Accrued operating

expenses (366,685) (542,005) (1,599,286) (2,507,976)Inter-group payables (22,934,555) (1,745,724) (3,156,501) (27,836,780)Loans from shareholders – (3,900,221) – (3,900,221)Borrowings – – (1,141,421) (1,141,421)

(23,541,470) (6,326,986) (7,753,861) (37,622,317)

Net financial liabilities (497,465) (4,567,603) (2,447,739) (7,512,807)

Financial (liabilities)/assets denominated in the respective entities’ functional currencies (21,764,590) 1,263,710 433,306 (20,067,574)

Currency exposure of financial liabilities, net of those denominated in the respective entities’ functional currencies (22,262,055) (3,303,893) (2,014,433) (27,580,381)







The Company’s currency exposure based on the information provided to key management is as follows:


At 31 December 2019Financial assetsCash and cash equivalents 1,528 – – 1,528Other receivables 22,914,081 – 36,487 22,950,568Deposits 9,623 – – 9,623

22,925,232 – 36,487 22,961,719

Financial liabilitiesOther payables (503,335) (930,283) (31,599) (1,465,217)Accrued operating

expenses (487,699) – – (487,699)Lease liabilities (72,877) – – (72,877)

(1,063,915) (930,283) (31,599) (2,025,796)

Net financial assets/(liabilities) 21,861,321 (930,283) 4,888 20,935,926

Financial liabilities denominated in the entity’s’ functional currency (21,861,321) – – (21,861,321)

Currency exposure of financial liabilities, net of those denominated in the entity’s functional currency – (930,283) 4,888 (925,395)








At 31 December 2018 (restated)

Financial assetsCash and cash equivalents 18,617 8,032 – 26,649Other receivables 22,513,281 – 34,998 22,548,279

22,531,898 8,032 34,998 22,574,928

Financial liabilitiesOther payables (240,150) (797,138) (27,961) (1,065,249)Accrued operating

expenses (310,325) – – (310,325)

(550,475) (797,138) (27,961) (1,375,574)

Net financial assets/(liabilities) 21,981,423 (789,106) 7,037 21,199,354

Financial liabilities denominated in the entity’s’ functional currency (21,981,423) – – (21,981,423)

Currency exposure of financial liabilities, net of those denominated in the entity’s functional currency – (789,106) 7,037 (782,069)







If the SGD, USD and IDR change against the respective functional currencies by 5% (2018: 5%), 5% (2018: 5%) and 5% (2018: 5%) respectively with all other variables including tax rate being held constant, the effects arising from the net financial liability/asset position will be as follows:

Increase/(Decrease)2019 2018Loss

after taxLoss

after tax

GroupSGD– Strengthened 936,333 923,875– Weakened (936,333) (923,875)USD– Strengthened 144,219 137,112– Weakened (144,219) (137,112)IDR– Strengthened 155,895 83,599– Weakened (155,895) (83,599)CompanyUSD– Strengthened 38,607 32,748– Weakened (38,607) (32,748)IDR– Strengthened (203) (292)– Weakened 203 292

(ii) Price risk

The Group and Company have insignificant exposure to equity risk because it does not hold any financial assets which are classified as financial assets at fair value through profit or loss.

(iii) Interest rate risk

The Group and Company have insignificant exposure to interest rate risk as at 31 December 2019 and 2018.





(b) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The major classes of financial assets of the Group and of the Company are bank deposits and trade and other receivables. For trade and other receivables, the Group adopts the policy of dealing only with customers with appropriate credit standing and history.

Credit exposure to an individual counterparty is restricted by credit limits that are approved by the Chief Financial Officer based on ongoing credit evaluation. The counterparty’s payment pattern and credit exposure are continuously monitored by the Chief Financial Officer.

Coal sales to customers are required to be settled in cash, mitigating credit risk. The Group has significant credit exposure to one counterparty which comprised 92% (2018: 100%) of the total trade and other receivables as at 31 December 2019. The directors are of the opinion that the amounts are fully recoverable.

As the Group and the Company do not hold collateral the maximum exposure to credit risk to each class of financial instruments is the carrying amount of that class of financial instruments presented on the balance sheet.

Bank deposits and other receivables from non-related parties are subject to immaterial credit loss.

(i) Trade receivables

The Group uses a provision matrix to measure the lifetime expected credit loss allowance for trade receivables.

In measuring the expected credit losses, trade receivables are assessed based on the specific credit risk characteristics and days past due. In calculating the expected credit loss rates, the Group considers historical loss rates for the customer and adjusts to reflect current and forward-looking macroeconomic factors affecting the ability of the customer to settle the receivables.

Trade receivables are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Group. The Group considers a financial asset as in default if the counterparty fails to make contractual payments within 1 year when they fall due, and writes off the financial asset when a debtor fails to make contractual payments greater than 1 year past due. Where receivables are written off, the company continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognised in profit or loss.

Management assessed that there is immaterial loss allowance relating to these receivables in the current and previous financial years.





(b) Credit risk (continued)

(ii) Impairment of financial assets

The Company’s other receivables due from subsidiaries of US$22,918,632 (2018: US$22,533,413) as at 31 December 2019 is subject to more than immaterial credit losses where the expected credit loss model has been applied.

The expected credit loss is measured based on the loss when default considering the probability of default by the subsidiaries. In making this assessment, the Company considers the financial ability of the subsidiaries to make those payments.

An allowance for expected credit loss of the full amount has been provided as the full receivable is assessed to be non-recoverable.

(c) Liquidity risk

The table below analyses non-derivative financial liabilities of the Group and the Company into relevant maturity groupings based on the remaining period from the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying amounts as the impact of discounting is not significant.

Less than 1 year

Between 1 and 2 years

Between 2 and 5 years

Over 5 years

US$ US$ US$ US$

GroupAt 31 December 2019Trade and other payables 1,533,768 – – –Accrued operating expenses 3,832,025 – – –Borrowings 2,843,682 – – –Lease liabilities 65,732 37,708 1,162 –Loans from shareholders – 4,184,847 – –

At 31 December 2018Trade and other payables 2,235,919 – – –Accrued operating expenses 2,507,976 – – –Borrowings 1,141,421 – – –Loans from shareholders – 4,184,847 – –

CompanyAt 31 December 2019Trade and other payables 1,465,217 – – –Accrued operating expenses 487,699 – – –Lease liabilities 37,893 36,254 – –

At 31 December 2018Trade and other payables 1,065,249 – – –Accrued operating expenses 310,325 – – –





(d) Capital risk

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder value.

The Board of Directors monitors capital based on a gearing ratio. The gearing ratio is calculated as net debt divided by total capital. Net debt is calculated as loans from shareholders plus borrowings, trade and other payables, accrued operating expenses and finance lease liabilities less cash and cash equivalents. Total capital is calculated as total equity plus net debt.


(restated)

Net debt 12,229,213 9,344,674Total equity (6,571,008) (5,809,622)

Total capital 5,658,205 3,535,052

Gearing ratio 216% 264%


(restated)

Net debt 2,024,265 235,911Total equity (1,901,858) (1,324,820)

Total capital 122,407 (1,088,909)

Gearing ratio 1,654% –(a)

The Group and the Company are in compliance with all externally imposed capital requirements for the financial years ended 31 December 2018 and 2019.

(a) Not meaningful





(e) Financial instruments by category

The aggregate carrying amounts of loans and receivables, financial assets and financial liabilities at amortised cost are as follows:


(restated)

Financial assets, at amortised cost 5,150,419 2,221,118Financial liabilities, at amortised cost 12,209,162 9,785,537


(restated)

Financial assets, at amortised cost 11,151 26,649Financial liabilities, at amortised cost 2,025,796 1,375,574

31. RELATED PARTY TRANSACTIONS

(a) In addition to the information disclosed elsewhere in the financial statements, the following transactions took place between the Group and a related party at terms agreed between the parties:


Professional services rendered by a related party – 25,166

A related party is a company which is controlled by a director.

(b) Key management personnel compensation

Key management personnel compensation is as follows:


Wages and salaries 552,868 784,360Share-based payments 46,809 238,671Employer’s contribution to defined contribution plans,

including Central Provident Fund 8,270 10,822

607,947 1,033,853



32. SEGMENT INFORMATION

Management has determined the operating segments based on the reports reviewed by management that are used to make strategic decisions.

The management considers that the entire Group’s operations constitute a single segment which is the exploration and mining of coal in Indonesia. The mining concessions in Indonesia are held by investment holding companies incorporated in Singapore and Hong Kong. The management assesses the performance of the Group’s operations based on the profit before income, total assets and total liabilities which are measured in a manner consistent with that of the financial statements.

33. EVENTS OCCURRING AFTER BALANCE SHEET DATE

(a) On 30 January 2020, the Company entered into separate convertible bond agreements with 3 subscribers, pursuant to which the Company proposes to issue to the subscribers convertible bonds of up to an aggregate S$25,000,000 in two tranches, namely Series A Bonds and Series B Bonds. Each convertible bond has a maturity date of 36 months from the date of relevant bonds have been issued or registered.

Upon entering into the convertible bond agreements, the subscribers have agreed to subscribe for Series A Bonds of an aggregate of S$5,000,000. Subsequently, the subscribers have the option to subscribe for Series B bonds of up to an aggegrate of S$20,000,000 at any time on or before the maturity date of Series A Bonds.

On 26 March 2020, the Company has successfully issued Series A bonds of S$2,000,000.

(b) In 20 March 2020, the shareholders entered into a sixth supplemental deed to the shareholders’ loan agreements with subsidiaries dated on 20 December 2012 and 26 March 2013 to extend the Non-Repayment Period to 31 March 2022. Refer to Note 22 of the financial statements.

(c) The outbreak of the Novel Coronavirus (“Covid-19”) has impacted the local and international business environment. While Covid-19 outbreak may have an impact on the international market, underlying low calorie coal demand for the local market remains healthy. The Group’s current operation is not significantly impacted by the ongoing Covid-19 pandemic. Notwithstanding the foregoing, pending further development and spread of Covid-19 subsequent to the date of this announcement, further changes in economic conditions for the Group arising thereof may have impact on the financial results of the Group, the extent of which could not be estimated as at the date of this report.

In response to the various Covid-19 restrictions imposed by various governments, the Group has taken various measures to limit the spreads of Covid-19. On 31 March 2020, the Indonesian government declared a Covid-19 public health emergency. Subsequent to the implementation of Limitation of Large-Scale Social Interactions with effect from 10 April 2020 by the region of Jakarta, the Group’s office in Jakarta has implemented work-from-home arrangement for its staff and employees. Similarly, following the circuit breaker measures enactment in Singapore, the Group’s office in Singapore has implemented working from home processes with telecommuting becoming the order of the day to effect appropriate social distancing. The Group also provides medical supplies such as hand sanitizers and masks to its employees, restricting non-essential travels, as well as educating staff and employees about the Covid-19 symptoms and possible prevention measures.



34. RETROSPECTIVE ADJUSTMENT OF PRIOR YEAR ERRORS

As at 31 December 2018, the Group had deposits and prepayments of US$120,365, property, plant and equipment of US$5,611,681 and mining properties of US$7,307,069, relating to a coal concession to which the Group has a right. The carrying amount of investment in a subsidiary of the Company was US$13,315,868. Management assessed that the above assets relating to the coal concession are part of the same cash-generating unit whose recoverable amount is determined based on the value-in-use of the coal concession.

On 18 September 2018, a heads of agreement to collaborate with a state-owned power plant operator in Indonesia had expired, resulting in a significant decrease in future demand for the Group’s coal in the Riau coal concession.

Consequently, the cash flow able to be generated from the coal concession is unable to support its carrying value. Management reassessed the information available and conditions as at 31 December 2018 and concluded that the recoverable amount of the coal concession as at 31 December 2018 should have been nil. Deposits and prepayments, property, plant and equipment and mining properties of the Group and investment in a subsidiary of the Company were restated during the year through a retrospective adjustment. The adjustment has no impact to the beginning of the preceding period.

The effects of the adjustment are as follows:

The GroupAs previously Prior year

reported adjustment RestatedUS$ US$ US$

2018Other expense 1,291,296 12,746,405 14,037,701Loss before tax 6,177,905 12,746,405 18,924,310Loss after tax 6,178,935 12,746,405 18,925,340Basic and diluted loss per share (0.66) (1.35) (2.01)

As previously Prior yearreported adjustment Restated

US$ US$ US$

As at 31 December 2018Deposits and prepayments 314,136 (120,365) 193,771Mining properties 7,307,069 (7,307,069) –Property, plant and equipment 5,614,469 (5,611,681) 2,788Accumulated loss 47,558,844 12,617,094 60,175,938Currency translation reserve 2,076,535 289,778 2,366,313Non-controlling interest 112,787 132,243 245,030

The CompanyAs previously Prior year

reported adjustment RestatedUS$ US$ US$

As at 31 December 2018Investment in subsidiaries 13,316,575 (13,315,868) 707Currency translation reserve (781,151) 275,903 (505,248)Accumulated loss 159,752,764 13,039,965 172,792,729



35. NEW OR REVISED ACCOUNTING STANDARDS, AMENDMENTS AND INTERPRETATIONS

The Group has not early adopted any mandatory standards, amendments and interpretations to existing standards that have been published but are only effective for the Group’s accounting periods beginning on or after 1 January 2020. However, management anticipates that the adoption of these standards, amendments and interpretations will not have a material impact on the financial statements of the Group in the period of their initial adoption.

36. AUTHORISATION OF FINANCIAL STATEMENTS

These financial statements were authorised for issue in accordance with a resolution of the Board of Directors of BlackGold Natural Resources Limited on 29 June 2020.



No of issued shares – 1,003,743,770No of Treasury Shares Held – NilNo of Subsidiary Holdings Held – NilClass of Shares – Ordinary sharesVoting Rights – On a show of hands: 1 vote On a poll: 1 vote for each ordinary share

Shareholdings Held in Hands of Public

As at 31 May 2020, approximately 65% of the issued ordinary shares of the Company is held by the public and therefore, Rule 723 of the Listing Manual Section B: Rules of Catalist of the Singapore Exchange Securities Trading Limited has been complied with.

ANALYSIS OF SHAREHOLDINGS

Range of Shareholdings No. of Shareholders % No. of Shares %

1 – 99 3 0.21 32 0.00

100 – 1,000 346 23.71 114,779 0.01

1,001 – 10,000 207 14.19 1,159,058 0.12

10,001 – 1,000,000 829 56.82 154,596,700 15.40

1,000,001 and above 74 5.07 847,873,201 84.47

1,459 100.00 1,003,743,770 100.00

TOP 20 SHAREHOLDERS

No. Name of Shareholders No. of Shares %

1 UOB Kay Hian Pte Ltd 408,431,991 40.692 BNP Paribas Nominees Singapore Pte Ltd 89,662,556 8.933 DBS Nominees Pte Ltd 54,948,785 5.474 OCBC Securities Private Ltd 26,231,209 2.615 Yao Hsiao Tung 21,800,000 2.176 Phillip Securities Pte Ltd 17,426,600 1.747 United Overseas Bank Nominees Pte Ltd 11,950,500 1.198 Raffles Nominees (Pte) Ltd 10,689,100 1.069 Goh Guan Siong (Wu Yuanxiang) 9,690,000 0.97

10 NCL Housing Pte Ltd 8,500,000 0.8511 Wong Chi Wai Roy (Huang Zhiwei) 8,500,000 0.8512 CGS-CIMB Securities (S) Pte Ltd 8,341,700 0.8313 Vincent Lawrence 7,030,900 0.7014 Lin Guan Yu @ Jerry Lum 6,845,800 0.6815 Tan Yong Chuan 6,600,000 0.6616 Ho Beng Siang 6,300,000 0.6317 Ian Frederick 6,300,000 0.6318 Chin Siew Weng 6,141,400 0.6119 Wong Yat Foo 6,000,000 0.6020 Ng Kia Jin 5,500,000 0.55

726,890,541 72.42

SHAREHOLDINGS STATISTICSAs at 31 May 2020


SUBSTANTIAL SHAREHOLDERS (as shown in the register of substantial shareholders)

Name of Substantial ShareholderDirect Interest No. of Shares %

Deemed Interest No. of Shares %

1. Rockfield Lake Limited 105,386,197 10.50 – –2. Lerman Ambarita1 – – 105,386,197 10.503. Twin Gold Ventures S.A 96,074,260 9.57 – –4. Sujono Hadi Sudarno2 – – 103,203,167 10.285. Novel Creation Holdings Limited 82,162,556 8.19 – –6. Sudiarso Prasetio3 – – 83,362,556 8.317. Luhendri 63,333,333 6.31 – –

Notes:

1. Lerman Ambarita is deemed interested in 105,386,197 Shares held by Rockfield Lake Limited.2. Sujono Hadi Sudarno is deemed interested in 96,074,260 Shares held by Twin Gold Ventures S.A. and 7,128,907 Shares

held by Cerenti Investments Ltd. 3. Sudiarso Prasetio is deemed interested in 82,162,556 Shares held by Novel Creation Holdings Limited.

SHAREHOLDINGS STATISTICSAs at 31 May 2020


NOTICE IS HEREBY GIVEN that the Annual General Meeting (“AGM”) of BLACKGOLD NATURAL RESOURCES LIMITED (the “Company”, and together with its subsidiaries, the “Group”) will be held by way of electronic means on Tuesday, 14 July 2020 at 10.00 a.m., for the following purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the Audited Financial Statements of the Company and the Group for the financial year ended 31 December 2019, the Directors’ Statement and the Independent Auditor’s Report thereon.

(Resolution 1)

2. To record the retirement of Mr. Wahyu Mahadi, a Director retiring pursuant to Article 94 of the Constitution, who has decided not to seek for re-election and will retire at the conclusion of the AGM. [See Explanatory Note I]

3. To re-elect Mr Bangun Madong Parulian Samosir, a Director of the Company retiring pursuant to Article 94 of the Constitution of the Company and who, being eligible, offer himself for re-election, as a Director of the Company. [See Explanatory Note II]

(Resolution 2)

4. To re-elect Mr Andreas Rinaldi, a Director of the Company retiring pursuant to Article 95 of the Constitution of the Company and who, being eligible, offer himself for re-election, as a Director of the Company. [See Explanatory Note III]

(Resolution 3)

5. To approve Directors’ fees of up to S$396,000 (2019: S$185,000) for the financial year ending 31 December 2020 to be payable on an annual basis.

(Resolution 4)

6. To re-appoint Messrs PricewaterhouseCoopers LLP as the Auditors of the Company and to authorise the Directors to fix their remuneration.

(Resolution 5)

7. To transact any other ordinary business which may properly be transacted at an AGM.

AS SPECIAL BUSINESS

To consider and, if thought fit, to pass the following resolutions as ordinary resolutions with or without any modifications:

8. Authority to allot and issue shares and convertible securities.

That, pursuant to Section 161 of the Companies Act, Chapter 50 of Singapore (the “Companies Act”), and Rule 806 of the Listing Manual Section B: Rules of Catalist of the Singapore Exchange Securities Trading Limited (“SGX-ST”) (“Catalist Rules”), authority be and is hereby given to the Directors of the Company to:

(A) (i) issue shares in the capital of the Company (“Shares”) whether by way of rights, bonus or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require Shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into Shares; and/or

NOTICE OF ANNUAL GENERAL MEETING


(iii) issue additional Instruments arising from adjustments made to the number of Instruments previously issued in the event of rights, bonus or capitalization issues, at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and

(B) (notwithstanding the authority conferred by this Resolution may have ceased to be in force at the time the Shares are to be issued) issue Shares in pursuance of any Instruments made or granted by the Directors while this Resolution was in force, provided that:

(i) the aggregate number of Shares to be issued pursuant to this Resolution (including Shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 100% of the total number of issued Shares excluding treasury shares and subsidiary holdings in the capital of the Company (as calculated in accordance with sub-paragraph (ii) below), and provided further that where shareholders of the Company (“Shareholders”) are not given the opportunity to participate in the same on a pro-rata basis, then the aggregate number of Shares to be issued under such circumstances (including Shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 50% of the total number of issued Shares excluding treasury shares and subsidiary holdings in the capital of the Company (as calculated in accordance with sub-paragraph (ii) below); and

(ii) (subject to such manner of calculation and adjustment as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of Shares and Instruments that may be issued under sub-paragraph (i) above, the percentage of the aggregate number of Shares and Instruments shall be based on the total number of issued Shares (excluding treasury shares and subsidiary holdings) in the capital of the Company at the time this Resolution is passed, after adjusting for:

(a) new Shares arising from the conversion or exercise of convertible securities;

(b) new Shares arising from exercising share options or vesting of share awards outstanding, provided the options or awards were granted in compliance with the provisions of the Catalist Rules; and

(c) any subsequent bonus issue, consolidation or subdivision of Shares;

provided that adjustments in accordance with (a) and (b) above are only to be made in respect of new Shares arising from convertible securities, share options or share awards which were issued and outstanding or subsisting at the time of the passing of this Resolution;

(iii) in exercising the authority conferred by this Resolution, the Company shall comply with the rules, guidelines and measures issued by the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Constitution for the time being of the Company; and

(iv) (unless revoked or varied by the Company in general meeting), the authority conferred by this Resolution shall continue in force until the conclusion of the next AGM of the Company or the date by which the next annual general meeting of the Company is required by law to be held, whichever is the earlier. [See Explanatory Note IV]

(Resolution 6)



9. Authority to grant share options and issue Shares under the BlackGold Employee Share Option Scheme.

That, pursuant to Section 161 of the Companies Act, authority be and is hereby given to the Directors of the Company to grant share options in accordance with the provisions of the BlackGold Employee Share Option Scheme (the “ESOS”) and to issue from time to time such number of Shares in the capital of the Company as may be required to be issued pursuant to the exercise of the share options granted under the ESOS, provided always that the aggregate number of Shares to be issued pursuant to the ESOS, when aggregated together with the Shares issued and/or issuable in respect of all share options granted under the ESOS, and all Shares issued and/or issuable in respect of all share options or share awards granted under any other share schemes or share plans adopted by the Company for the time being, shall not exceed 15% of the total number of issued Shares (excluding treasury shares and subsidiary holdings) in the capital of the Company from time to time and that such authority shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next AGM of the Company or the date by which the next AGM of the Company is required by law to be held, whichever is the earlier. [See Explanatory Note V]

(Resolution 7)

10. Authority to grant share awards and issue Shares under the BlackGold Share Award Scheme.

That, pursuant to Section 161 of the Companies Act, authority be and is hereby given to the Directors of the Company to grant share awards in accordance with the provisions of the BlackGold Share Award Scheme (the “ESAS”) and to issue from time to time such number of Shares in the capital of the Company as may be required to be issued pursuant to the vesting of share awards under the ESAS, provided always that the aggregate number of Shares to be issued pursuant to the ESAS, when aggregated together with the Shares issued and/or issuable in respect of all share options granted under the ESAS, and all Shares issued and/or issuable in respect of all share options or share awards granted under any other share schemes or share plans adopted by the Company for the time being, shall not exceed 15% of the total number of issued Shares (excluding treasury shares and subsidiary holdings) in the capital of the Company from time to time and that such authority shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next annual general meeting of the Company or the date by which the next AGM of the Company is required by law to be held, whichever is the earlier. [See Explanatory Note V]

(Resolution 8)

BY ORDER OF THE BOARD

Nor Hafiza AlwiCompany Secretary

SINGAPORE29 June 2020



Explanatory Notes:

I. Mr. Wahyu Mahadi will retire as a Director at the conclusion of the AGM. Upon Mr. Wahyu Mahadi’s retirement, he will cease to be an Independent Director of the Company.

II. Mr. Bangun Madong Parulian Samosir will, upon re-election as a Director of the Company, remain as an Independent Director of the Company.

III. Mr Andreas Rinaldi will, upon re-election as a Director of the Company, remain as an Executive Director and Chief Executive Officer of the Company.

Detailed information (including information as required pursuant to Rule 720(5) of the Catalist Rules) on the abovementioned Directors who are proposed to be re-elected at the AGM of the Company can be found in the sections entitled “Board of Directors”, “Corporate Governance Report” and “Directors’ Statement” of the Company’s Annual Report 2019.

IV. Resolution 6, if passed, will authorise and empower the Directors of the Company from the date of the AGM until the next AGM of the Company, or the date by which the next AGM is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earliest, to issue Shares and to make or grant convertible securities convertible into Shares, and to issue Shares in pursuance of such instruments, up to an amount not exceeding in aggregate 100% of the total number of issued Shares (excluding treasury shares and subsidiary holdings) in the capital of the Company of which the total number of Shares and convertible securities issued other than on a pro-rata basis to existing Shareholders shall not exceed 50% of the total number of issued Shares (excluding treasury shares and subsidiary holdings) in the capital of the Company at the time this Resolution is passed, for such purposes as they consider would be in the interests of the Company.

V. Resolutions 7 and 8 proposed in items 9 and 10 above, if passed, will empower the Directors of the Company from the date of the AGM of the Company until the conclusion of the next AGM of the Company, or the date by which the next AGM of the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to allot and issue Shares pursuant to the exercise of options and vesting of awards under the ESOS and ESAS respectively, when added to the number of Shares issued and issuable under other share-based incentives schemes or share plans of the Company shall not exceed fifteen percent (15%) of the total number of issued Shares (excluding treasury shares and subsidiary holdings, if any) from time to time.

Notes:

1. The AGM will be convened and held, by electronic means pursuant to the COVID-19 (Temporary Measures) (Alternative Arrangements for Meetings for Companies, Variable Capital Companies, Business Trusts, Unit Trusts and Debenture Holders) Order 2020. A printed copy of this Notice will not be despatched to members. This Notice has been made available on SGXnet and at the Company’s website at http://blackgold.listedcompany.com/newsroom.html.

2. Alternative arrangements relating to, among others, attendance, submission of questions in advance and/or voting by proxy at the AGM to be held on Tuesday, 14 July 2020 at 10.00 a.m. are set out in the Company’s announcement dated 29 June 2020 (“Announcement”), which has been uploaded together with this Notice of AGM on SGXNET. The Announcement may also be accessed at the URL: http://blackgold.listedcompany.com/newsroom.html.

3. In particular, the AGM will be held by way of electronic means and a member of the Company will be able to observe the proceedings of the AGM through a “live” webcast (“LIVE AGM WEBCAST”) via mobile phones, tablets or computers with an internet connection or listen to these proceedings through a “live” audio feed (“AUDIO ONLY MEANS”) via telephone. In order to do so, a member of the Company who wishes to watch the LIVE AGM WEBCAST or listen via the AUDIO ONLY MEANS must pre-register and provide their email address by 11 July 2020 at 10.00 a.m. (“Registration Deadline”) (being not less than 72 hours before the time appointed for holding the AGM) at the URL: https://blackgoldagm.listedcompany.com/2020-agm (“AGM Webcast Registration and Q&A Link”). Following the authentication of status as members of the Company, authenticated members will receive email instructions on how to access the LIVE AGM WEBCAST and AUDIO ONLY MEANS to observe the proceedings of the AGM by 12 July 2020.

A member of the Company who pre-registers to watch the LIVE AGM WEBCAST or listen to the AUDIO ONLY MEANS may also submit questions related to the resolutions to be tabled for approval at the AGM via the AGM Webcast Registration and Q&A Link by the Registration Deadline (being not less than 72 hours before the time appointed for holding the AGM).

4. Due to the current Covid-19 restriction orders in Singapore, a member of the Company will not be able to attend the AGM in person. If any members of the Company (whether individual or corporate) wishes to exercise their voting rights at the AGM, they must appoint the Chairman of the AGM as their proxy to attend, speak and vote on their behalf at the AGM.

In appointing the Chairman of the AGM as proxy, a member of the Company (whether individual or corporate) must give specific instructions as to voting, or abstentions from voting, in the proxy form, failing which the appointment will be treated as invalid. The accompanying proxy form for the AGM may be accessed at the Company’s corporate website at the URL: http://blackgold.listedcompany.com/newsroom.html and has also been uploaded together with the Announcement on SGXNET.



5. The Chairman of the AGM, as proxy, need not be a member of the Company.

6. The instrument appointing the Chairman of the AGM as proxy, together with the power of attorney or other authority under which it is signed (if applicable) or notarial certified copy thereof, must be sent to the Company in the following manner:

(a) If sent by post, be lodged and received at the office of the Company’s Share Registrar, M&C Services Pte. Ltd. at 112 Robinson Road #05-01, Singapore 068902; or

(b) If submitted by email, be received as a clear readable image by the Company’s Share Registrar, M&C Services Pte. Ltd, at the email address [email protected].

in either case, by no later than 10.00 a.m. on 12 July 2020 (being not less than 48 hours before the time appointed for holding the AGM) and in default the instrument shall not be treated as valid.

In view of the current Covid-19 situation and the related safe distancing measures which may make it difficult for members of the Company to submit completed proxy forms by post, members of the Company are strongly encouraged to submit completed proxy forms electronically via email.

7. The instrument appointing the Chairman of the AGM as proxy must be under the hand of the appointor or on his/her attorney duly authorised in writing. Where the instrument appointing the Chairman of the AGM as proxy is executed by a corporation, it must be executed either under its common seal or under the hand of its attorney or duly authorised officer, failing which the instrument of proxy may be treated as invalid.

8. For investors who hold shares through relevant intermediaries, including CPF and SRS investors, who wish to appoint the Chairman of the AGM as proxy should contact their relevant intermediaries (which would include, in the case of CPF and SRS investors, their respective CPF Agent Banks and SRS Operators) through which they hold such shares, to submit their votes at least seven (7) working days before the AGM.

Personal data privacy:

By submitting (a) a proxy form appointing the Chairman of the AGM as proxy to vote at the AGM and/or any adjournment thereof, or (b) Shareholder particulars for pre-registration to participate in the AGM via LIVE AGM WEBCAST or AUDIO ONLY MEANS, or (c) submitting any question prior to the AGM in accordance with this Notice of AGM or the Announcement, a Shareholder (i) agrees that the member will indemnify the Company in respect of any penalties, liabilities, claims, demands, losses and damages as a result of the member’s breach of warranty; and (ii) consents to the collection, use and disclosure of the Shareholder’s personal data by the Company (or its agents, advisers or service providers, as the case may be) for the following purposes:

(i) processing and administration by the Company (or its agents, advisers or service providers) of proxy forms appointing the Chairman of the AGM as proxy for the AGM (including any adjournment thereof) and the preparation and compilation of the attendance lists, proxy lists, minutes and other documents relating to the AGM (including any adjournment thereof);

(ii) processing of pre-registration for participation at the AGM for purpose of granting access to Shareholders to the LIVE AGM WEBCAST or AUDIO ONLY MEANS and providing them with any technical assistance where necessary;

(iii) addressing relevant and substantial questions related to the resolutions to be tabled for approval at the AGM from members received before the AGM and if necessary, following up with the relevant members in relation to such questions;

(iv) preparation and compilation of the attendance list, proxy lists, minutes and other documents relating to the Meeting (including any adjournment thereof); and

(v) enabling the Company (or its agents, advisers or service providers, as the case may be) to comply with any applicable laws, listing rules, regulations and/or guidelines by the relevant authorities.

Sound and/or video recordings of the AGM may be made by the Company for record keeping and to ensure the accuracy of the minutes of the AGM. Accordingly, the personal data of a member (such as name, presence at the AGM and any questions raised or motions proposed/seconded) may be recorded by the Company for such purposes.

This notice has been prepared by the Company and its contents have been reviewed by the Company’s Sponsor,

SAC Capital Private Limited (the “Sponsor”). This notice has not been examined or approved by the Singapore Exchange Securities Trading Limited (the “SGX-ST”) and the SGX-ST assumes no responsibility for the contents of this notice including the correctness of any of the statements or opinions made, or reports contained in this notice.

The contact person for the Sponsor is Mr David Yeong (Telephone number: +65 6232 3210), at 1 Robinson Road, #21-00 AIA Tower, Singapore 048542.



BLACKGOLD NATURAL RESOURCES LIMITED (Company Registration No. 199704544C) (Incorporated in the Republic of Singapore)

PROXY FORM

ANNUAL GENERAL MEETING

This proxy form has been made available on SGXNet and the Company’s website and may be accessed at the URL http://blackgold.listedcompany.com/newsroom.html. A printed copy of this proxy form will NOT be despatched to members of the Company.

IMPORTANT:

1. Alternative arrangements relating to, among others, attendance, submission of questions in advance and/or voting by proxy at the AGM are set out in the Company’s announcement dated 29 June 2020 (“Announcement”) which has been uploaded together with the Notice of AGM dated 29 June 2020 on SGXNET on the same day. The Announcement may also be accessed at the Company’s corporate website at the URL: http://blackgold.listedcompany.com/newsroom.html.

2. A Shareholder will not be able to attend the AGM in person. If a Shareholder (whether individual or corporate) wishes to exercise his/her/its voting rights at the AGM, he/she/it must appoint the Chairman of the AGM as his/her/its proxy to attend, speak and vote on his/her/its behalf at the AGM. In appointing the Chairman of the AGM as proxy, a Shareholder (whether individual or corporate) must give specific instructions as to voting, or abstentions from voting, in the form of proxy, failing which the appointment will not be treated as valid.

3. For CPF/SRS Investors who have used their CPF/SRS moneys to buy shares in BlackGold Natural Resources Limited, this form of proxy is not valid for use and shall be ineffective for all intents and purposes if used or purported to be used by them. CPF/SRS Investors should contact their respective Agent Banks/SRS Operators if they have any queries regarding their appointment as proxies.

I/We (Name) (NRIC/Passport No.)

of (Address)

being a Member/Members* of BLACKGOLD NATURAL RESOURCES LIMITED (“Company”), hereby appoint the Chairman of the AGM of the Company, as my/our* proxy to vote for me/us* on my/our* behalf at the AGM to be held by way of electronic means (via LIVE AGM WEBCAST and/or AUDIO ONLY MEANS) on 14 July 2020 at 10.00 a.m. and at any adjournment thereof. I/We* direct the Chairman of the AGM to vote for or against, or abstain from voting on the resolutions to be proposed at the AGM as indicated hereunder. If no specific direction as to voting is given or in the event of any other matter arising at the AGM and at any adjournment thereof, the appointment of the Chairman of the AGM as my/our* proxy will be treated as invalid.All resolutions put to the vote at the AGM shall be decided by way of poll.

If you wish to exercise all your votes “For” or “Against”, or “Abstain” the relevant Resolutions, please mark an “X” in the appropriate box provided. Alternatively, please indicate the number of votes “For” or “Against”, or “Abstain” each Resolution in the boxes provided as appropriate. If you mark an “X” in the abstain box for a particular Resolution, you are directing your proxy, who is the Chairman of the AGM, not to vote on that Resolution

No. Resolutions For Against Abstain

Ordinary Business

1 To receive and adopt the Audited Financial Statements of the Company and the Group for the financial year ended 31 December 2019, the Directors’ Statement and the Independent Auditors Report thereon.

2 To re-elect Mr. Bangun Madong Parulian Samosir, a Director retiring under Article 94 of the Constitution of the Company.

3 To re-elect Mr. Andreas Rinaldi, a Director retiring under Article 95 of the Constitution of the Company.

4 To approve Directors’ fees of up to S$396,000 (2019: S$185,000) for the financial year ending 31 December 2020 to be payable on an annual basis.

5 To re-appoint Messrs PricewaterhouseCoopers LLP as the Auditors of the Company and to authorise the Directors to fix their remuneration.

Special Business

6 Authority to allot and issue Shares and convertible securities.

7 Authority to grant share options and issue Shares under the BlackGold Employee Share Option Scheme.

8 Authority to grant share awards and issue Shares under the BlackGold Share Award Scheme.

Dated this day of 2020. Total no. of Shares in No. of Shares

(a) Depository Register

(b) Register of Members

Signature(s) of Member(s)/Common Seal of Corporate Member(s)

* Delete where inapplicable

IMPORTANT: PLEASE READ NOTES FOR PROXY FORM OVERLEAF

NOTES FOR PROXY FORM

1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as defined in Section 81SF of the Securities and Futures Act, Chapter 289 of Singapore), you should insert that number of Shares. If you have Shares registered in your name in the Register of Members, you should insert that number of Shares. If you have Shares entered against your name in the Depository Register and Shares registered in your name in the Register of Members, you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register of Members. If the number of Shares is not inserted, the instrument appointing a proxy or proxies will be deemed to relate to the entire number of Shares in the Company registered in your name(s).

2. A Shareholder will not be able to attend the AGM in person. If a Shareholder (whether individual or corporate) wishes to exercise their voting rights at the AGM, they must appoint the Chairman of the AGM as their proxy to attend, speak and vote on their behalf at the AGM. In appointing the Chairman of the AGM as proxy, a Shareholder (whether individual or corporate) must give specific instructions as to voting), or abstentions from voting, in the form of proxy, failing which the appointment will be treated as invalid.

3. The instrument appointing the Chairman of the AGM as proxy must be sent to the Company in the following manner:

(a) If sent by post, be lodged and received at the office of the Company’s Share Registrar, M&C Services Pte. Ltd. at 112 Robinson Road #05-01, Singapore 068902; or

(b) If submitted by email, be received sent as a clear readable image by the Company’s Share Registrar, M&C Services Pte. Ltd, at the email address [email protected].

in either case, by no later than 10.00 a.m. on 12 July 2020 (being not less than 48 hours before the time appointed for holding the AGM, and in default the proxy form shall not be treated as valid.

In view of the current Covid-19 situation and the related safe distancing measures which may make it difficult for Shareholders to submit completed proxy forms by post, Shareholders are strongly encouraged to submit completed proxy forms electronically via email

4. The Chairman of the AGM, as proxy, need not be a member of the Company.

5. For investors who hold shares through relevant intermediaries, including CPF and SRS investors, this proxy form is not valid for their use and shall be ineffective for all intents and purposes if used or purported to be used by them. Investors who wish to appoint the Chairman of the AGM as proxy should contact their relevant intermediaries (which would include, in the case of CPF and SRS investors, their respective CPF Agent Banks and SRS Operators) to submit their votes at least seven (7) working days before the AGM.

6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his/her attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand of an attorney or duly authorised officer. Where the instrument appointing a proxy or proxies is executed by an attorney on behalf of the appointor, the letter or power of attorney or a duly certified copy thereof must be lodged with the instrument appointing a proxy or proxies, failing which the instrument of proxy may be treated as invalid.

7. The Company shall be entitled to reject an instrument appointing a proxy or proxies which is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified on the instrument appointing a proxy or proxies. In addition, in the case of Shares entered in the Depository Register, the Company may reject an instrument appointing a proxy or proxies if the member, being the appointor, is not shown to have Shares entered against his/her name in the Depository Register as at 72 hours before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.

Personal data privacy:

By submitting an instrument appointing a proxy(ies) and/or representative(s), the member accepts and agrees to the personal data privacy terms set out in the Notice of the AGM dated 29 June 2020.

BOARD OF DIRECTORSSoh Sai KiangIndependent Non-Executive Chairman

Andreas RinaldiExecutive Director and Chief Executive Officer

Lim Chee SanIndependent Director

Chng Hee KokIndependent Director

Bangun Madong Parulian SamosirIndependent Director

Wahyu MahadiIndependent Director

AUDIT COMMITTEELim Chee San, ChairmanChng Hee KokSoh Sai Kiang

NOMINATING COMMITTEESoh Sai Kiang, ChairmanChng Hee KokLim Chee San

REMUNERATION COMMITTEEChng Hee Kok, ChairmanLim Chee SanSoh Sai Kiang

COMPANY SECRETARY

Nor Hafiza Alwi

AUDITORS

PRICEWATERHOUSECOOPERS LLPPublic Accountants and Chartered Accountants7 Straits View, Marina OneEast Tower, Level 12Singapore 018936

AUDIT PARTNER-IN-CHARGEMohamad Saiful SaroniAppointed since the financial year ended 31 December 2018

SHARE REGISTRAR

M&C SERVICES PTE LTD112 Robinson Road#05-01, Singapore 068902

PRINCIPAL BANKERSDBS BANK LTD12 Marina BoulevardDBS Asia CentralMarina Bay Financial CentreTower 3, Singapore 018982

SPONSORSAC CAPITAL PRIVATE LIMITED1 Robinson Road#21-00 AIA TowerSingapore 048542

REGISTERED OFFICE7 Temasek Boulevard #08-07Suntec Tower OneSingapore 038987Tel: (65) 6884 4418Fax: (65) 6884 4406Website: http://www.blackgold-group.com


Co. Reg. No. 199704544C7 Temasek Boulevard

#08-07 Suntec Tower OneSingapore 038987

Tel : (65) 6884 4418 Fax : (65) 6884 4406www.blackgold-group.com

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